STORY: News Analysis: Is the worst over for Türkiye's inflation woes?
SHOOTING TIME: June 28, 2024
DATELINE: June 29, 2024
LENGTH: 0:02:48
LOCATION: Ankara
CATEGORY: ECONOMY

SHOTLIST:
1. various of a candy shop in Türkiye
2. various of a cafe in Türkiye
3. various of a vegetable bazaar in Türkiye
4. SOUNDBITE (Turkish): MUSTAFA SONMEZ, Istanbul-based economist

STORYLINE:

Türkiye's annual inflation has exceeded 75 percent, the highest in the past 18 months. While officials suggest this may represent the peak before a potential easing of prices, experts caution that the high cost of living is likely to linger.
   
Türkiye's Treasury and Finance Minister Mehmet Simsek, who took on the challenging task of overseeing a comprehensive recovery program in June 2023, implemented a tighter monetary policy and declared that the "worst is over" as consumer prices reached what is believed to be a peak in May.

Simsek reversed Ankara's low interest rate policy that favored growth over price stability, implementing stringent fiscal measures.

This move attracted hard currency, revitalized the central bank's low reserves, and helped stabilize the weakened national currency.

On Tuesday, Simsek said on social media platform X said Türkiye is on the verge of a "sharp decline in inflation," predicting that it would slow to as low as 40 percent in September and help bring more international investment needed for the country's recovery.
   
However, economists said that while year-on-year inflation may drop, monthly rises will persist, thereby continuing to strain consumers financially.

SOUNDBITE (Turkish): MUSTAFA SONMEZ, Istanbul-based economist
"Monthly inflation will not decrease. Inflation is projected to continue to increase by 2.5 percent each month. 
What will decrease is year-on-year inflation.
As price increases were significant in June 2023, arithmetically we will witness a drop in annual inflation. 
Inflation will drop on an annual basis but every month, consumer prices will continue to climb.
At the end of this year, we may see an annual inflation rate of 40 percent, but this is a very high rate globally. 
Inflation should drop to single digits for it not to be a problem.
Therefore, we cannot say that the disinflation programme is a success for the moment. 
Prices are consistently rising, impacting consumers. 
We will not see a decrease in prices; instead, they will continue to rise as most households struggle to make ends meet due to stagnant wages."

Meanwhile, Türkiye's ruling Justice and Development Party is expected to submit soon a new tax reform package to parliament as part of a series of austerity measures to fight runaway inflation.
   
The reform package is part of a concerted effort to enhance and develop Türkiye's fiscal discipline, guaranteeing a more equitable tax system, party officials said.
   
However, strict tax law compliance, government inspections and more expensive loans have burdened small business owners.
   
"Small businesses are struggling with financial challenges," Bengi Vural, a cosmetics shop owner from Ankara, complained.
   
"It has become very difficult to keep up with the economy and anti-inflation measures," the shop owner said.

Xinhua News Agency correspondents reporting from Ankara.
(XHTV)