The 2023-2025 Medium Term Programme (OVP) was released in the government’s Official Gazette. The economy is expected to grow by 5.0% in 2023 and 5.5% in 2024 and 2025, while the annual inflation is targeted at 24.9% in 2023, 13.8% in 2024, and 9.9% in 2025, according to the OVP. However, a budget deficit ‘surprise’ was observed in the OVP, as the year-end budget deficit, which was estimated at TRY 278.34bn in June, now is expected to surge by 65.7% to TRY 461.2bn for 2022. The budget is expected to post a TRY 659bn deficit, corresponding to 14.1% of the country’s gross domestic product (GDP), at the end of 2023.
Treasury and Finance Minister Nureddin Nebati, who evaluated the 2023-2025 OVP, tweeted that average GDP growth was planned at 5.3% and employment is estimated to increase by 2.7 million during the OVP period. Nebati also said the policies set within the frame of the OVP aim for high value-added production, permanent improvement in the current account balance, productivity, and export increase. “We expect the central government budget deficit to be 1.5% of the GDP,” Nebati added.
Regarding the agenda of the week, the Cabinet will convene under the presidency of President Recep Tayyip Erdogan today to discuss the steps to fight against inflation and exorbitant prices as well as regulations to resolve low-income citizens’ execution and distraint issues. As part of the new, two-step regulation, around 6 million people’s debt, on which execution proceedings have commenced, will be eliminated. Their debt hovers around TRY 30bn. Moreover, the social housing project, which will be announced on September 13, will also be discussed at the meeting. Foreign policy and the fight against terrorism will also be agenda items.
President Recep Tayyip Erdogan will visit Bosnia and Herzegovina, Serbia, and Croatia on September 6-8, 2022.
Republican People’s Party (CHP) Chairman Kemal Kilicdaroglu will continue to hold group meetings in a different city every Tuesday during the summer months. Kilicdaroglu will be in Sinop with his deputies on September 6.
On Tuesday, The Central Bank will release the Real Effective Exchange Rate for August at 2.30 p.m. The Consumer Price Index (CPI)- based real effective exchange rate (REER) rose by 1.75% from 53.08 points to 54.01 points in July, compared to the previous month.
Monthly inflation (CPI) was recorded as 1.46% while annual inflation reached 80.21% in August, compared to the previous month, according to the Turkish Statistical Institute (TurkStat).
The domestic producer price index (D-PPI) jumped 143.75% in August, year-over-year, according to TurkStat. The D-PPI rose by 2.41% on a monthly basis.
IN OUR MAGAZINE THIS WEEK:
>> On the cover: The Germany-based telecommunication company Deutsche Telekom broke a new record by increasing its brand value by 18% from USD 51.1bn the previous year to USD 60.2bn last year. This rise has made the company rank second among the world’s most valuable brands on the Brand Finance Global 500 list. Benefitting from this valuable brand, the company’s Turkey operation Deutsche Telekom Turkey achieved significant growth with an annual increase of 25% in the last two years, according to Sinan Kilicoglu, General Manager of Deutsche Telekom Turkey. You can read the details on pages 8-9.
>> Professor Ilter Turan: Lessons from history and Ukraine. P. 10.
>> Q&A: Prof. Dr. Sebnem Kalemli-Ozcan, Neil Moskowitz Endowed Professor of Economics and Finance at the University of Maryland, College Park. P. 11.
>> Chief Economist Gunduz Findikcioglu: What do banks do? Pp. 12-13.
>> Our Foreign Policy Columnist Zeynep Gurcanli analysis foreign intervention and what it left behind on page 14.
>> The Ministry of Industry and Technology prepared 868 investment incentive certificates in July. The value of the certified projects totals TRY 38.16bn. These investments are estimated to employ 24,169 people.
>> Exports performed in TRY jumped 109% to TRY 23.79bn in August, compared to the same month last year, according to daily DUNYA. Imports performed in TRY totaled TRY 23.79bn in the same period.
>> The price of gasoline and diesel fuel has been raised by TRY 0.56, and TRY 0.69 per liter, according to sources from the sector. The price of liquefied petroleum gas (LPG) has been reduced by TRY 0.41. The new prices will be valid as of today.
>> A TRY 40bn turnover is expected to be recorded from direct and indirect education expenditures this year, according to Bendevi Palandoken, President of the Confederation of Turkish Tradesmen and Craftsmen (TESK).