Turkey will not compromise budget discipline: Minister

Last week, data showed Turkey’s inflation soared to a 15-year high of nearly 25% in September

Turkish Finance Minister Berat Al Bayrak said there would be no compromise in budget discipline in his programme to combat surging inflation due to be announced this week, the state-run Anadolu news agency reported yesterday.

Earlier last week data showed Turkey’s inflation soared to a 15-year high of nearly 25 per cent in September, with prices jumping 6.3 per cent from a month earlier.

The size of the increase far outpaced expectations and underscored the deep impact of a currency crisis on the economy and consumers, after the lira lost nearly 40 per cent of its value this year.

Following the release of the inflation data on Wednesday, Al Bayrak said he would announce a programme as part of the government’s “fullfledged” battle against rising consumer prices.

“There is no compromise in budget discipline, the rebalancing period in the economy has started. A strong programme to combat inflation will be announced,” Al Bayrak was quoted as telling members of the ruling AK Party yesterday.

Concerns about President Tayyip Erdogan’s influence over the central bank and a rift between Ankara and Washington that led to reciprocal sanctions and trade restrictions have pushed the lira into meltdown. In an attempt to rein in the plunging currency, the central bank delivered a massive 6.25 percentage point rate hike last month. The currency has been underpinned by this and by hopes that ties with the US may improve.

The sell-off has pushed up prices of everything from food to fuel and eroded confidence in the market.