Cevdet Yılmaz: Our goal is to reduce inflation to single digits

The Bill of Law on the Amendment of the 2023 Central Government Budget Law and its Affiliated Schedules, which includes the additional budget of 2023, has started to be discussed in the General Assembly of the Grand National Assembly of Turkey.

Speaking on behalf of the government at the meetings, Vice President Yılmaz said that the budget targets and forecasts for 2023 were determined within the framework of the macroeconomic outlook and expectations in the second half of 2022.

Stating that the ongoing global inflation, disruptions in supply chains, fluctuating course in commodity prices, the Russia-Ukraine war and the recent Kahramanmaraş-centered earthquake disasters have caused serious changes in the macroeconomic outlook and assumptions, Yılmaz said that the work started immediately to erase the traces of the earthquakes has led to significant increases in public expenditures. noted why.

Noting that the cost of the destruction caused by the earthquake was calculated as approximately 104 billion dollars, Yılmaz said, “These developments have affected our income expectations and expenditure sizes and changed our needs. There has been a need for revision in our budget for the year. he said.

Yılmaz emphasized that with the appropriations determined in the additional budget proposal, they aim to continue the construction and restoration activities of the provinces affected by the earthquake in the best way, to meet the needs of the nation from disabled citizens to the elderly with social supports, to be with all segments of the country, from farmers to tradesmen, who create value, and to continue their development steps with infrastructure-superstructure projects. .

Global inflationary consolidation

Pointing out that the world economy is going through a period full of new uncertainties, risks and difficulties, Yılmaz said that the global inflationary hardening also strengthened the expectations that central banks of developed countries could continue with a tighter monetary policy framework in the fight against inflation in the future.

“While tightening monetary policy practices pose the risk of recession, it is feared that premature abandonment of financial tightening may underlie the failure of the fight against global inflation and long-term economic problems.” Yilmaz said that due to these uncertainties and risks in the global economy, global inflation doubled in 2021 and 2022 than the average of the 2000s, and in the current reports of international organizations on the global economic outlook, global inflation is expected to remain above the average of the 2000s in the near future. .

“Türkiye is positively differentiated”

Cevdet Yılmaz stated that the Turkish economy has managed to maintain its resilience against all shocks in this period, which is witnessing the transition to a new global order, and that the economy, which has caught a rapid growth and recovery trend in the post-pandemic period, has many fundamental problems, especially growth and employment, despite the Russia-Ukraine war. stated that it differentiated positively compared to other economies in very concrete indicators.

Yılmaz said, “The biggest earthquake disaster of the last century that took place in February caused significant human and economic destruction, and despite these devastating effects, our economy grew by 4 percent in the first quarter of 2023 and continued its uninterrupted growth trend in the post-epidemic period.” said.

Yılmaz noted that their main macroeconomic goal in the upcoming period is to reduce inflation rates to single-digit levels again.

Cevdet Yılmaz stated that as of the seasonally adjusted May 2023 data, the total employment reached 31.7 million, and stated that the April and May data showed an increasing trend again in the labor force participation and employment rates after February and March.

Emphasizing that the BIST-100 index gained 161.4 percent in Turkish lira and 74 percent in US dollars compared to the previous year, Yılmaz said that as the second half of the year entered, new historical peaks were seen successively above the level of 6 thousand points.

Yılmaz stated that the continued high performance of exporters, the increasing profitability of the real sector and the strong balance sheet stance of the financial sector were influential on this situation and noted that Turkey’s 5-year CDS premium decreased significantly compared to the previous year.

“We foresee an additional income of 1 trillion 119.5 billion liras in total”

Vice President Yılmaz stated that the total appropriation need is 1 trillion 119.5 billion liras, 482.8 billion liras for the construction of disaster houses and repair of infrastructure damages, with the aim of meeting the needs of the citizens who were damaged by the earthquake and eliminating the damages in the building stock of public administrations. Noting that an appropriation of 527.3 billion liras is foreseen, he announced that in 2023, a total of 762 billion liras will be spent from the budget in order to compensate for earthquake damages, when other appropriation opportunities are taken into account.

Yılmaz, in the distribution of the expenditures of the supplementary budget excluding the earthquake, for the resources to be transferred to the special provincial administrations and municipalities of 110.4 billion TL; For investment expenditures of 105.5 billion TL; 52.1 billion TL for agricultural supports, agricultural sector investments, agricultural loan subsidies, intervention purchases and agricultural SEEs; He said that 44.3 billion liras will be used for disabled home care support, pensions over 65 years old and disabled citizens, aid payments to families in need and other social expenses.

Expenses other than earthquake

Giving information about the distribution of expenses other than earthquakes in the additional budget, Yılmaz said that 39.9 billion liras for the needs of the defense and security units; 26.3 billion TL for education services such as disability education support, school meal expenses, free textbooks and auxiliary material expenses, transportation education expenses; For private pension state contribution expenses of 8.4 billion liras; For the assignment expenses of 8 billion liras of loans provided to artisans, craftsmen and farmers from public banks; For the general lighting expenses of 7.8 billion TL; For the system usage fees of 4.3 billion liras for free natural gas supply to residences, places of worship and cemevis; In order to cover the expenses incurred due to the cancellation and postponement of the electricity and natural gas bills of the citizens in the earthquake zone of 1.3 billion liras; 103.4 billion TL for other compulsory expenditures; He stated that 80.5 billion liras are expected to be used for interest expenses.

Yılmaz stated that as required by law, revenue should be included in the supplementary budget as required by law and said, “The growth of Gross Domestic Product, changes in the general level of prices, strong demand, and the increase in e-commerce and card expenditures were effective in the realization of budget revenue. We anticipate that the income estimation target in the table will be achieved. With the additional budget we have prepared in this context, we foresee an additional income of 1 trillion 119.5 billion liras, including 1 trillion 71.1 billion liras in tax revenues and 48.4 billion liras in non-tax incomes.” he said.

Vice President Yılmaz wished that the additional budget would bring goodness to the country and all social segments, especially the earthquake victims.