© Archyde.com.
ISTANBUL (Archyde.com) – Turkey expects the annual inflation rate to decline to 65 percent by the end of 2022, from about 80 percent in July, government estimates published on Sunday showed, while it expects the current account deficit to rise to $47.3 billion this year.
President Recep Tayyip Erdogan’s new economic model prioritizes growth, export, employment and investment, while seeking to lower interest rates.
The monetary easing cycle pursued by the Central Bank last year led to a 44 percent drop compared to the end of December, and its decline by more than 27 percent again this year.
The decline of the lira and the rise in energy and commodity prices worldwide have increased inflation, which reached nearly 80 percent in July, and is expected to rise further before it declines.
Ankara expects inflation to drop to 65 percent by the end of 2022 before dropping sharply to 24.9 percent by the end of 2023, according to the so-called medium-term programme.
Erdogan’s model aims to turn Turkey’s chronic current account deficit into a surplus, but high global prices have made this goal difficult to achieve.
The trade balance deficit for 2022 amounted to $105 billion, more than double last year’s amount. Expectations are for it to decline to $80 billion in 2023.
The current account deficit was expected to reach $47.3 billion in 2022, more than three times its level in 2021 and to reach its highest annual level since 2013. There are expectations that it will decline to $22 billion in 2023.
The budget deficit rose sharply to 461.2 billion liras ($25.4 billion) in 2022, despite the presentation of a supplementary budget this year. Expectations indicate that it will rise to 659.4 billion liras in 2023.
Excluding income and financial flows resulting from interest and some other factors, the deficit was expected to reach 294.3 billion liras in 2022 and 323.6 billion liras in 2023.
Gross domestic product is forecast to grow by 5 percent in 2022 and 2023 before rising to 5.5 percent in the following two years.
(dollar = 18.1777 lira)
(Prepared by Marwa Gharib and Noha Zakaria for the Arabic Bulletin – Edited by Ali Khafaji)