Finance minister says high inflation 'temporary'

Click to read the article in Turkish

Minister of Treasury and Finance Nureedin Nebati gave a speech at the 65th general assembly of the Banks Association of Turkey yesterday (May 30).

For the first time in the history of Turkey's banking sector, its asset size exceeded 10 trillion liras, and the sector has a share of about 85 percent in the financial system, said the minister.

Nebati said the amount of loans reached 5.5 trillion lira and deposits reached 6 trillion lira, adding that the sector made a net profit of 93 billion lira last year (1 US dollar = 16.40 Turkish lira).

About the soaring inflation rates, Nebati said developed and developing countries are struggling with the highest inflation rates of the past 40 years.

"In the face of all negative developments, we have subsidized the price increases that our citizens and producers are exposed to, by using the available resources effectively," he remarked.

Turkey's annual inflation rate rose to 70 percent in April, a two decade high. It was over 156 percent, according to an independent group of economists.

Increasing costs

Nebati said they consider the high inflation rates to be temporar, noting that the leading indicators show that the country's growth rate would be 7 percent in the first quarter.

"The global economy is going through a difficult time. High increases in commodity prices, problems in the supply chain and rising prices in transportation caused inflation to rise sharply all over the world. Today, developed countries are experiencing the highest inflation in the last 40 years.

"We think that supply-side and cost-driven factors come to the fore in the rise in inflation, and therefore, the deterioration in the inflation outlook is temporary.

"We continue to take steps to ensure that the price increases affect the citizens at a minimum level. We subsidize the price increases that our citizens and producers are exposed to." (HA/VK)