President Recep Tayyip Erdoğan on Wednesday said it would take a little more time for inflation to stop being a problem, as he acknowledged the economic challenges that he says remain unresolved.
“The imbalances caused by the pandemic have not yet been fully corrected, and inflation, which has reached its highest levels in 70 years, will take more time to cease being a problem,” Erdoğan told a convention of Turkish contractors behind international projects at an event in the capital Ankara.
Annual inflation dipped below 52% in August, compared to its peak of 75% this May. The sharp drop is expected to continue amid an aggressive tightening campaign to cool overheated demand.
Since June last year, the country’s central bank has hiked interest rates by 4,150 basis points to 50% and has maintained that it will keep its monetary policy tight until inflation aligns with its targets.
The bank forecasts inflation to slow to 38% at the end of this year and 14% next, projecting it to decline further to 9% by the end of 2026.
The government’s updated medium-term economic program forecasts, released last week, see inflation falling to 41.5% by year-end. It is forecasted to ease to 17.5% by the end of 2025 and 9.7% by 2026.
Erdoğan cautioned that while Türkiye has covered a significant ground in many areas, the global economic disruptions, exacerbated by the COVID-19 pandemic, have yet to stabilize.
He acknowledged a slight decline in project revenues for Turkish contractors this year but expressed confidence in a quick recovery in the near future.
Türkiye has 243 firms operating internationally. It ranks second only to China in terms of the number of contractors and ranks among the top eight countries globally by revenue, according to the latest list of the top 250 international contractors published by ENR magazine.
“The success of our construction firms abroad demonstrates the strength of the Turkish economy and its human resources,” Erdoğan said.
The sector employs around 6 million people both directly and indirectly in Türkiye.
Turkish builders have undertaken around $515 billion (TL 17.56 trillion) worth of projects across 137 countries in the last 52 years, said Erdoğan.
The president recalled that the country’s gross domestic product (GDP) had surpassed $1.1 trillion for the first time last year.
He stressed the achievement in exports, which peaked at $256 billion in 2023, compared to only $36 billion in 2002.
Erdoğan also pointed to growth in tourism, where Türkiye has seen a surge from 13 million tourists in 2002 to nearly 57 million today.
