CBRT Chairman Şahap Kavcıoğlu spoke at the information meeting held at the Bank’s Headquarters to promote the second inflation report of this year.
Here are the highlights of Kavcıoğlu’s statements:
“The growth forecasts for 2023 have been updated upwards compared to previous reports.
The contribution of our strong policy framework to the resilience of our economy is clearly visible.
Our country has managed to maintain its high growth together with the increase in productivity.
Considering the purchasing power parity, the Turkish economy converges to the figures of developed countries.
Central Bank Governor Şahap Kavcıoğlu announces the inflation report. https://t.co/yBexwquGMo
— TRT News Live (@trthabercanli) May 4, 2023
“The Turkish economy has taken its place among the fastest growing economies on a global scale”
The horizontal course of the industry in the first quarter of the worst disasters in our history shows the resilience of our economy.
Rising global inflation and tightening in financial conditions have led to increased risks on the financial system in developed countries.
The Turkish banking sector maintains its safe and sound appearance with the support of the holistic strategy we implement.
GDP continued its strong performance in 2021 and grew by 5.6 percent in 2022. In both periods, the Turkish economy took its place among the fastest growing economies on a global scale.
Our country’s industrial production increased nearly three times the average of developing countries.
“It is estimated that approximately 289 billion dollars will be contributed to the current account balance by 2030”
Turkey has been among the countries that increased its employment the most in the last 2 years.
Our exports, which remained strong in 2022 despite the war and the decrease in global demand, continue to prove its resilience with its diversified structure at the product and country level, despite the continuing weakness in demand conditions and earthquake disaster in 2023.
The remainder of 2023 will be a period in which the current account balance gets stronger.
With the return of our investments to increase the capacity of high technology, energy, underground wealth and tourism, it is estimated that a cumulative contribution of approximately 289 billion dollars will be provided to the current account balance until 2030.
“Inflation shows a steady downward trend”
The tourism sector, which supports the growth and employment of the service sector in 2022, continues its strong course in 2023 as well. In March, 12-month cumulative tourism revenues reached 48.6 billion dollars, reaching their highest value ever. Similarly, the total number of visitors exceeded 53 million, reaching its historical peak.
Inflation fell by 42 points from its peak of 85.5 percent in October, reaching 43.7 percent as of April. Inflation shows a steady downward trend.
Exchange rate stability as a result of our effective policies, the improvement in expectations and the slowdown in global commodity prices play a decisive role in the disinflation process. The downward trend in inflation was somewhat slower than the path we announced in the previous inflation report.
Our indicators for the underlying trend of inflation confirm the marked slowdown in price increases. Core indicators have recently dropped to the lowest levels recorded since October 2021.
As of July 2022, TL commercial loan rates have decreased by around 18 points in line with our policy rate. The 10-year TL security interest rates have also declined since March 2022, dropping by nearly 15 points.
“We kept our inflation forecasts constant”
Thanks to the effectiveness of our targeted loan policy, which we pursue with determination, the share of SMEs, which was below 40 percent of TL corporate loans in the first quarter of 2021, increased to 43 percent in the first quarter of 2022 and to 62 percent in 2023.
We kept our inflation forecasts unchanged at 22.3 percent for the end of 2023 and 8.8 percent for the end of 2024.
As a result of our liraization steps and diversified reserve management, we have significantly increased the resilience of our reserves. We will maintain our strong reserve structure, which also serves as an important anchor in reducing the volatility in the foreign exchange markets.
While the downward trend in inflation continues, we anticipate that our production and current surplus capacity will develop simultaneously, financial resources will be used in the most efficient way, and activities for the recovery of the disaster area will continue successfully.”