Vice President Yilmaz: We started to see the monthly effects of our fight against inflation. We will start to see the annual impact from mid-2024. There will be a significant decrease in inflation.
In his speech at the 7th Istanbul Economy Summit held at Ciragan Palace with the theme “Sustainable Life and Smart Cities”, Vice President Cevdet Yilmaz said that under the leadership of President Recep Tayyip Erdogan, they have accelerated the work that will reduce uncertainty and increase predictability in the economy.
Noting that political uncertainty disappeared with the elections in May, Yilmaz explained that they eliminated policy uncertainties with the 5-year development plan and Medium Term Program (MTP) they prepared.
Yilmaz said, “While our Central Bank is implementing the updated monetary policy, on the other hand, we are continuing the fiscal policies without losing discipline despite the extra expenses caused by earthquakes and disasters. On the other hand, we are completing this picture with structural reforms.”
Yilmaz emphasized that the Turkish economy has grown by an average of 5.4% annually in 20 years and continued as follows:
“The world’s growth average in the same period was 3.6. The Turkish economy achieved an average annual growth performance of 1.8 points above the world economy in the 20-year period. You may say, ‘This score is not very high for one year, it does not matter’, but when we achieve such a performance in 20 years, this is what makes the real difference. These small differences that we see, cumulatively over the years, bring the countries to a very important place. Turkiye is currently the 17th largest economy in the world in nominal dollar terms. This year, we expect our economy to reach a size of nearly 1.1 trillion in 2023. Last year it was 905 billion. According to IMF data, we will be the 17th largest economy. Now, when we go back 12 months, we have already achieved this. Moreover, according to purchasing power parity, Turkiye is the 11th largest economy in the world.”
WE RECORDED 4.6 GROWTH IN THE 9 MONTHS OF THIS YEAR
Reminding that they made large investments in Turkiye when investments were possible at a much lower cost, Yilmaz said, “If you try to make the same investments today, you can only achieve it with much higher costs, with these cost increases in the world. I am glad we did it, I wish we had done it more.”
Stating that they will continue to grow the economy on the basis of investments, Yilmaz said:
“We recorded a growth of 4.6 in the 9 months of this year. We are achieving a growth of 4.6 in a period when the world is expected to grow around 3%. Despite the earthquake and the measures we have taken to reduce inflation in the economy, we continue to grow at a certain pace. The unemployment rate is 8.9%. We have unemployment in single digits. 5-year credit risk premium CDR rates have fallen to their lowest levels in the last 2.5 years in the monetary policy, fiscal policy and political trust and stability environment we follow. Currently around 330. It had risen to around 700 in May this year. It is now at a very low level. But this is not enough, we will take it further.”
WE HAVE STARTED TO SEE THE MONTHLY EFFECTS OF OUR FIGHT AGAINST INFLATION
Cevdet Yilmaz emphasized that they are faced with the reality of inflation and that they have not forgotten it, and continued his words as follows:
“Our first priority is to reduce inflation in the macro economy and strengthen our macro financial stability. In this context, we have started to fight inflation strongly. Normally, inflation is lower in the summer months and rises in the autumn due to seasonal effects. This year we are experiencing the exact opposite. Inflation was quite high during the summer months due to the exchange rate increase and some other effects. With the effect of the measures we took, we see that inflation dropped significantly on a monthly basis, even though seasonal conditions were unfavorable in the autumn. We have reached the level of 3-odd percent. There is a more important indicator that we call core inflation. We are below 2% there. We started to see the monthly effects of our fight against inflation. We will start to see the annual impact from mid-2024. There will be a significant decrease in inflation as of mid-2024.”
THERE HAS BEEN A SERIOUS IMPROVEMENT IN THE CURRENT ACCOUNT DEFICIT RECENTLY
Stating that the Central Bank followed a new policy, Yilmaz said that they started to see the results of this in the reserve figures.
Reminding that the Central Bank’s gross reserves dropped to $98.5 billion in May, Yilmaz said, “As of yesterday, there was a statement that we have exceeded $140 billion. This is a record for Turkiye. We have never reached this level in our history. There was a huge increase in our Central Bank reserves. For this, we congratulate our Central Bank management and policies. We will further strengthen our reserves.”
Yilmaz stated that they are trying to reduce the current account deficit while controlling the budget deficit on the one hand, and said, “There has been a serious improvement in the current account deficit recently. By the end of the year, our current account deficit will have fallen to around 4%. At the end of our Medium Term Program, we anticipate reducing our current account deficit to 2%.”
SMART CITIES SHOULD NOT BE SEEN JUST AS A TECHNOLOGICAL PROJECT
Yilmaz noted that, on the one hand, they healed the wounds of the February 6 earthquake, and on the other hand, they considered investments to reduce risks against new disasters as a priority.
Reminding that the Urban Transformation Law was passed by the Parliament, Yilmaz explained that there are 3 directorates within the Urban Transformation Directorate established by the Presidential decree, which will provide financial support to urban transformation and urban transformation in the Marmara Region and all over Turkiye.
Noting that one of the most important elements of the Turkish Century will be urban planning studies, Yilmaz said, “Smart cities should not be seen only as a technological project. If any element of the city is considered without considering people, it will be incomplete and insufficient. This is how we look at development. We are in favor of a people-oriented approach to development. Where there are no people, you cannot talk about economy, technology or anything else. We have to put people at the center of everything. We need to evaluate the smart city with its social, economic and human dimensions. We cannot develop our cities with history, civilization values, culture and art while bringing them together with technology on the one hand. We need to maintain both together. When we achieve this, you provide a quality living environment.”
WE HAVE TO BE A PRODUCER OF NEW TECHNOLOGIES, NOT A MARKETER
Yilmaz emphasized that two environments need to be improved in order for a country to be called a developed country and said, “The first is the living environment, the second is the business and investment environment. When you do these two, when you provide people with a livable environment in a social sense, and when you provide an environment in terms of doing business, investment, working and entrepreneurship, let’s say that when these two environments come together, it is the formula for development. You don’t need to do anything beyond that.”
Yilmaz stated that smart city applications in Turkiye are mostly carried out in the field of infrastructure and transportation and mainly in metropolitan cities. “We prepared the National Smart Cities Strategy and Action Plan in order to build smart city investments in our country on a common mind and road map. Turkiye is one of the 4 countries in the world that has this strategy and action plan.”
Yilmaz noted that AK Party municipalities continue to be pioneers in the transition to smart city applications, “We aim to be a pioneer in this field, to produce national solutions, and to be a country that exports such applications to the world as we see our own needs, rather than a country that follows and consumes the world’s technology in the field of smart cities. We have to be a producer of new technologies, not a market for them.”
Vice President Cevdet Yilmaz stated that they are trying to carry these initiatives to every platform internationally.
Reminding that the Organization of Turkish States was established, Yilmaz concluded his words as follows:
“We will continue to share these collaborations with friendly countries. We consider it important to build cities that resist climate change and disasters under the strong, experienced and astute leadership of our President. We will develop qualified residential areas in line with our historical and cultural background. We will continue to create smart, safe, sustainable cities and living environments that provide accessible urban services for everyone, have a high quality of life, and are based on digital and green technologies. In this way, we will use our resources for human happiness, prosperity, and for our people to reach a better tomorrow, without wasting them.”
Source: Patronlardunyasi / Prepared by Irem Yildiz