by Burak Akinci
ANKARA, Jan. 3 (Xinhua) -- After several years of runaway inflation, Türkiye has managed to close in on its year-end target for 2024 after a challenging year marked by disinflation policies, experts said.
The annual inflation rate decreased more than expected to 44.38 percent in December, down from 47.09 percent in November, the country's statistical institute announced on Friday, marking a continuous drop since June last year as a result of anti-inflation measures established in mid-2023.
On a monthly basis, the consumer prices index rose at its slowest pace since May 2023, increasing by 1.03 percent in December, cooling from 2.24 percent in November.
"This result has to be considered as a success considering previous high inflation levels. Anti-inflation measures reached satisfactory results," economist Levent Yilmaz from capital Ankara's Haci Bayram Veli University commented on private broadcaster NTV.
Treasury and Finance Minister Mehmet Simsek hailed on X the figures shortly after their publication, saying that year-end inflation met the central bank's midpoint prediction, which was revised to 44 percent in November.
"In December, inflation was 1 percent, the lowest level in the last 19 months," said Simsek, pointing out that inflation in 2024 decreased by 20 points compared to the end of 2022 and 2023.
"The decline in inflation will continue," Simsek stressed, expressing optimism for the future. "We expect inflation to be in line with our targets in 2025."
The central bank's inflation forecast for 2025 is 21 percent, with further rate cuts anticipated in the coming months, after the first rate reduction decided in December last year following a two-year hiatus.
"These figures suggest the country is gradually recovering from some of the significant economic challenges it has faced in the past years," Senol Babuscu, a professor of finance from Ankara's Baskent University, told Xinhua.
While the expert noted a more positive outlook in terms of macroeconomic data, he pointed out that policymakers need to offer relief to households struggling with double-digit inflation.
In December 2024, the Turkish government raised the minimum wage by 30 percent for 2025. Simsek assured in his social media post that "solving citizens' high cost of living issues is our top priority."
Meanwhile, Türkiye's economic prospects have shown signs of improvement. The economic confidence index rose by 1.8 percent in December last year compared to November, reaching an eight-month high of 98.8, according to official data released on Dec. 30.
The international community also took note of Türkiye's improvements. Global credit rating agencies, Moody's, Fitch, and S&P Global, upgraded Türkiye's ratings throughout 2024, opening the door for more foreign direct investments. Additionally, Türkiye saw a significant improvement in its foreign currency reserves in 2024, which reached record level of 159.4 billion U.S. dollars as of Dec. 6.
To address calls for structural reforms, the Turkish government announced on Dec. 30 a major initiative that envisages investments of 14 billion dollars in the country's less developed southeastern provinces.
The plan includes increased spending in nine provinces near the borders with Syria and Iraq, historically the country's poorest regions, with funding allocated for some 200 projects.
A key focus will be boosting agricultural production by expanding irrigation systems, which is expected to create jobs for over 570,000 people by 2028 in a region still reeling from the devastating February 2023 earthquakes and facing high unemployment.
"By improving income levels, quality of life, and employment opportunities, the project aims to bridge regional disparities and contribute to national economic and social stability," said Abdullah Aysu, a development project expert from Ankara.