President Recep Tayyip Erdoğan reiterated on Saturday the main priority of the government's economic program to lower inflation as he said that there would be more interest rate cuts in 2025 after the central bank cut its key rate by 250 basis points to 47.5% earlier this week.
The Turkish central bank trimmed the one-week repo rate on Thursday after an 18-month tightening effort to tackle elevated prices.
"Priority in our economy program is to lower inflation ... We will hopefully reduce inflation to the required level by using other tools at our disposal in addition to the monetary policy," Erdoğan told members of his ruling Justice and Development Party (AK Party) in the northwestern city of Bursa.
"We will definitely start lowering the interest rates; 2025 will be the landmark year for this," he said.
"Interest rates will decrease so that inflation will decrease. We will take this step. This is now indispensable for us."
The annual inflation rate dipped to 47.1% in November compared to around 75% in May, marking the lowest since mid-2023.
Inflation is seen declining further to 45.2% in December, according to a recent Reuters poll which saw the annual rate falling to 26.5% by the end of 2025.
The central bank earlier announced that it had reduced the number of scheduled policy meetings next year to eight from 12 in 2024.
According to a Reuters poll's median, the central bank is expected to ease rates to about 28.5% by the end of 2025, with forecasts ranging between 25% and 33%.
"The main purpose of our economic program is to compensate for the welfare loss, which our nation, our fixed-income citizens in particular, has been experiencing due to the imbalances in exchange rates and inflation, as soon as possible. To that end, we must, first of all, eliminate such matters as inflation used as an excuse for the high cost of living," Erdoğan said at the congress of AK Party in Bursa.
"The arbitrary pricing habits of greedy opportunists, which cannot be explained by inflation, exchange or interest rates, of course, do not make our job easier, they make it harder. There is a group that perceives the free market economy as disorder and exploits it to the fullest, but we will overcome them," he added.
"In fact, the most effective method in this regard is for our nation to boycott products and services that increase prices excessively," he outlined.
Furthermore, drawing attention to housing and rental prices, which he said play an important role in inflation rise and the perception of the cost of living, President Erdoğan stressed that they are in preparation for taking a step that will prevent this, and added: "As of the summer months, during which the construction activities in the earthquake zone will be completed to a great extent, we are planning to launch a social housing mobilization."
Like this, he noted that they will take steps aimed at enabling fixed-income citizens to own their own houses.
Separately, at another event in Bursa on Saturday, the president also highlighted the confidence in the economic program as he pointed out to improvement in the economy, stating that the goals for 2024 have been achieved "to a large extent."
“We have full confidence and support for our economic program. We have achieved our goals for 2024 to a large extent despite the crises that resurfaced in our region and the elections. International capital inflow to our country has accelerated, our reserves have strengthened, foreign exchange volatility has decreased, and financing circumstances have improved," said Erdoğan.
"Our country's credit risk premium has also fallen significantly. We are the only country whose rating has been increased twice by the three credit rating agencies," he noted.
"We have also taken realistic steps and a common future vision in the 2025 budget. This year, we have allocated TL 1.57 trillion (nearly $44.7 billion) for investments," he added.
"In addition to the reconstruction of the earthquake zone, we have given priority to investments in irrigation, investments that will connect organized industrial zones with ports by rail, and investments that will quickly complete the industrial infrastructure," he said.
Speaking at the Award Ceremony for Contributors to Economy, the president also highlighted the importance they attached to maintaining the competitive strength in the apparel, textile, leather and furniture sectors.
In this regard, he said they planned to provide support payments of up to TL 2,500 per month per employee to small and medium-sized enterprises (SMEs) that maintain the employment level of the last months of 2024 in these sectors in 2025.
