Turkey implements measures to control public spending, tackle inflation
Date
5/14/2024 4:04:02 AM
(MENAFN) On Monday, Turkey's Finance Minister announced a series of measures aimed at "disciplining public spending" to address persistent inflation effectively. Mehmet Şimşek, Turkey's Treasury and Finance Minister, emphasized that the primary goal of "the savings and efficiency package in the public sector" is to alleviate the cost of living and reduce inflation to single digits.
Şimşek highlighted the importance of price stability as a fundamental component for fostering prosperity and sustainable high growth. The latest data from TurkStat revealed that Turkey's annual inflation rate increased to 69.8 percent in April from 68.5 percent in March, underscoring the urgency of implementing measures to combat inflation.
The government's medium-term economic program, unveiled last September, projected the year-end inflation rate to reach 33 percent for the current year, with forecasts of 15.2 percent in 2025 and 8.5 percent in 2026. The newly introduced measures aim to enhance efficiency in the public sector, establish robust monitoring, auditing, reporting, and sanction mechanisms, and encompass the entirety of public expenditures.
Şimşek emphasized that unlike previous approaches, the new measures will prioritize efficiency in public sector operations, leading to savings and increased effectiveness. These measures also aim to allocate more resources to address natural disasters and drive green and digital transformations. Additionally, Şimşek highlighted the importance of fiscal discipline in reducing the country's risk premium, enabling Turkey to borrow at more favorable rates and ensuring intergenerational justice by minimizing borrowing.
He outlined that the key pillars of the spending measures include public savings, budgetary spending discipline, and efficiency improvements in public investments. These measures reflect Turkey's commitment to addressing inflationary pressures and fostering sustainable economic growth.
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