The new Medium-Term Program (OVP) has been announced! The inflation expectation for 2024 has been raised to 41.5 percent.

Vice President Cevdet Yılmaz is announcing the Medium-Term Program (MTP) covering the period 2025-2027 at the Presidential Complex.

In the meeting attended by Treasury and Finance Minister Mehmet Şimşek, the 2024 inflation target was revised to 41.5 percent. The 2025 inflation, which was set at 15.2 percent last year, was also raised to 17.5 percent. The target for 2026 was also raised from 8.5 percent to 9.7 percent.

Here are some highlights from Cevdet Yılmaz's speech:

"The main objective of the 2025-2027 Program is to gradually reduce inflation to single digits, increase our growth potential in line with the disinflation process, increase investment, employment, production, and exports based on efficiency-enhancing structural reforms, and distribute income more fairly to all segments of our society with the increase in welfare. In line with these goals, the coordination of monetary, fiscal, and revenue policies will be strengthened, and the fight against inflation will be prioritized.

With this new MTP period, we are determining the steps and priorities to achieve sustainable growth and stability in our economy. In this context, strengthening human capital, increasing fixed capital investments, and improving total factor productivity will be prioritized in the sources of growth. Thus, our economy will increase its competitiveness and establish a sustainable growth path in the long term. Enhancing investment, employment, production, and exports based on efficiency-enhancing structural reforms is another critical strategy. These reforms aim to strengthen the basic structure of our economy and create a more efficient production and trade environment. In the medium and long term, it is expected to move from the upper-middle-income group to the upper-income group with the contribution of these reforms.

"INCREASING SOCIAL WELFARE IS AIMED"

In addition to healing the wounds of the earthquake and creating more resilient cities, increasing social welfare by ensuring a fair distribution of income to all segments is aimed. Our main goals are to ensure that economic growth offers equal opportunities for everyone and spreads to all segments of society. Finally, maximizing the benefits from the demographic opportunity window and integrating women and young population into the economy are targeted. This carries great potential for long-term economic growth.

This new MTP period includes important steps to strengthen Turkey's economic structure and achieve sustainable development goals. All these strategies and goals of the program will increase the welfare level of our country and enhance our competitiveness in the global arena.

"REFORMS ARE PLANNED IN VARIOUS AREAS"

In the new MTP period, reforms are planned in various areas to achieve sustainable growth and development goals in our economy. Firstly, our goal is to achieve Permanent Macroeconomic and Financial Stability. This reform area includes elements such as reducing inflation permanently to single digits, disciplining public finances, and ensuring financial stability. It is important to establish a strong macroeconomic foundation to make our economy more resilient to external shocks. Implementing Public Finance Reforms includes steps such as increasing efficiency in public spending, ensuring budget discipline, and managing public debt at manageable levels. These reforms will support the sustainability of public finances and long-term economic stability.

"AIMING TO PREPARE OUR WORKFORCE FOR THE NEEDS OF THE FUTURE"

Another priority area is the Development of R&D and Innovation Capacity. This aims to promote high value-added production by increasing our economy's innovation capacity. Supporting R&D investments and innovative projects will increase Turkey's competitiveness and accelerate its transition to a technology-oriented growth model. Ensuring Technological Transformation towards Green and Digital Economy is also among our priorities. This area includes the widespread adoption of environmentally friendly production methods and digitalization in line with sustainable development goals. These steps will increase both environmental sustainability and economic efficiency. Additionally, with the Strengthening of Human Capital and Activation of the Labor Market reforms, we aim to improve the quality of our workforce and increase employment rates. By investing in education and skill development programs, we aim to prepare our workforce for the needs of the future.

Continuing to Improve the Business and Investment Environment is another important area. Increasing ease of doing business, maintaining investor-friendly policies, and reducing bureaucracy will enhance the competitiveness of our economy. Finally, Reducing Informality in the Economy is a critical reform area. By combating the informal economy, we aim to prevent unfair competition, expand the tax base, ensure tax justice, and increase public revenues. These fundamental policy areas will implement the necessary structural changes for Turkey to achieve sustainable growth and development goals and ensure the long-term stability of our economy.

"AIMING FOR GROWTH TO REGAIN MOMENTUM"

In 2023, Gross Domestic Product (GDP) growth rate was realized as 5.1 percent. This growth rate reflects the effects of post-pandemic recovery and the resilience of the Turkish economy. However, overcoming the risk of high inflation and the balancing process require a more moderate and sustainable growth process. In this framework, it is expected that the growth rate will be 3.5 percent in 2024 due to increasing geopolitical tensions in our region. This represents a downward revision of 0.5 percent compared to the previous MTP. By 2025, it is aimed to achieve a growth rate of 4.0 percent as the economy recovers. During this period, it is expected that growth will regain momentum with the impact of economic reforms and structural adjustments. Growth rates of 4.5 percent and 5.0 percent are planned for 2026 and 2027, respectively. These goals aim to reach the potential growth capacity of the economy and achieve a stable growth trend in the long term.

This growth path is created with an approach that aims for sustainable economic development without creating inflationary pressures and is compatible with the disinflation process.Although the fight against inflation has temporary effects on growth in the short term, in the medium and long term, the two goals are compatible. Ensuring balanced and stable growth in the economy in an environment where inflation is low will increase Turkey's competitiveness both domestically and globally, and sustain economic prosperity. The new OVP period aims to contribute to achieving our country's economic goals with a balanced growth strategy. In this regard, we will continue to fight inflation and support economic growth by optimizing growth rates.

"GDP IS PLANNED TO REACH $20,420 BY THE END OF 2027"

While our GDP was at the level of 26.5 trillion TL in 2023 at current prices, it is expected to reach 44.2 trillion TL in 2024. In terms of dollars, we expect our national income to be 1 trillion 331 billion dollars and our per capita income to be 15,551 dollars by the end of 2024. By 2027, it is projected that GDP will reach 83.1 trillion TL. In terms of dollars, it is aimed for GDP to increase from 1.1 trillion dollars in 2023 to 1.8 trillion dollars in 2027. Per capita income, on the other hand, is planned to reach 20,420 dollars by the end of 2027, while it was at the level of 13,243 dollars in 2023. These indicators show that our economy will continue to grow and the level of prosperity will increase.

Increasing prosperity has been one of our most important priorities during our governments, and between 2002 and 2023, our national income has grown from 238 billion dollars to 1 trillion 130 billion dollars in the last twenty-year period. During this period, the purchasing power of our citizens has also made significant progress, and our per capita national income has increased from 9,279 dollars to 42,997 dollars according to purchasing power parity. Our country has become the 17th largest economy in nominal dollars and the 11th largest economy in terms of PPP. "

Details are coming.