Economic program to start yielding results as of H2: Erdoğan
PRESIDENT Recep Tayyip Erdoğan yesterday described Türkiye’s overall economic indicators as “quite positive” and said the nation would begin to see the results of the government’s economic program from the second half of the year.
“We are heading toward local elections. Today, we are being tested by the cost of living and the resulting decline in the welfare of our fixed-income citizens. We will overcome these challenges as well,” Erdoğan told a rally in the southwestern province of Isparta.
As inflation decreases, the president said, the government will have the opportunity to “better reflect the benefits of this positive economic situation to our workers and retirees.”
Annual inflation rose to over 67% in February and is envisaged to peak by the middle of the year before entering what officials say would be a steep downward trend. The central bank sees year-end inflation at as low as 36%.
After winning reelection last May, Erdoğan installed a new economy administration that delivered aggressive tightening and unveiled a mediumterm program aimed at arresting inflation, curbing chronic deficits, rebuilding foreign exchange reserves, and stabilizing the Turkish lira.
The Central Bank of the Republic of Türkiye (CBRT) has hiked interest rates by 3,650 basis points since June but paused its tightening cycle last month, saying that the current 45% policy rate is sufficient to bring inflation down.
The bank is expected to leave its benchmark policy rate unchanged for a second straight month on Thursday. However, according to market surveys, most economists forecast another rate hike later this year due to stubborn inflationary pressures.
“We will begin to see the results of the program we are implementing from the second half of this year onward. Indeed, our overall economic indicators are quite positive,” Erdoğan said.
Erdoğan also reiterated the ground that the Turkish defense industry has covered over the last two decades.
“Until recently, we had a defense industry entirely dependent on foreign sources,” he said. The localization drive since the early 2000s helped Türkiye lower its foreign dependency in the defense industry from around 80% to some 20% today.
“We are one of the top three countries globally in unmanned aerial vehicle technology. With our national combat aircraft KAAN, we have become one of the four countries worldwide capable of producing fifth-generation aircraft,” Erdoğan said.
Led by Baykar’s Bayraktar TB2 unmanned combat aerial vehicles, the success on many battlefields has made Türkiye one of the world’s top suppliers of drones.
On the other hand, KAAN, the fifthgeneration jet, conducted its inaugural flight last month to mark the latest advancement in the country’s efforts to upgrade its air force and curb external dependency.
The warplane is sought to replace the aging F-16 fleet in the inventory of the Air Forces Command, which is planned to be phased out starting in the 2030s.
Türkiye aims to use domestically produced engines on KAAN in serial production, which is expected to start in 2028.