Treasury and Finance Minister Berat Albayrak

Turkey expects inflation to start falling in the last quarter thanks to the nationwide mobilization

Treasury and Finance Minister Berat Albayrak stressed that the Turkish economy will see inflation drop in the last quarter of the year as a result of the government’s expansive efforts to mitigate inflation and economic rebalancing. In a bid to combat inflation, the Turkish government launched a campaign last week by recruiting the private sector and banks. Called the “Full-Scale Fight against Inflation,” the program offers price discounts in the retail sector, including food and textile, no increase in electricity and gas bills, and lower interest rates for bank loans. Among the measures announced to curb inflation was a campaign for a minimum price cut of 10 percent nationwide.

To support businesses and maintain investments, banks will decrease interest rates by 10 percent on loans issued after Aug. 1, Albayrak said yesterday. According to the latest reports, more than 500 companies have so far joined the anti-inflation campaign. “In combating inflation, we will continue to maintain the downward trend with figures first in October and then in November and December, and we will collect the fruits of this fight together in the entire economy,” he said. In September, inflation hit 24.52 percent on a year-on-year basis, up 6.3 percent from the previous month, according to the Turkish Statistical Institute (TurkStat). Inflation climbed for a sixth straight month, hitting the highest level in almost 15 years. October’s inflation figures will be announced on Nov. 3.

As noted in Turkey’s New Economy Program (NEP) announced last month, the country’s inflation rate target for this year is 20.8 percent. The target for next year is 15.9 percent, 9.8 percent for 2020 and 6.0 percent for 2021.”At the end of this process, which we started to support with structural steps, we will see together that we are saving our economy from two shackles called inflation and interest step by step,” he added.In his speech at the opening ceremony of “Vision 2023 Great Turkey Summit,” the minister pointed to the importance of choosing the new airport as the venue for the organization.The first phase of the new airport project will be inaugurated with President Recep Tayyip Erdoğan in attendance at the end of the month, Albayrak recalled, stressing that the project will be one of the clearest messengers of 2023 Turkey.He pointed out that 2023 Turkey is a realistic and visionary target commissioned all together and approached step by step, not a trivial dream.

October 16, 2018


Turkish real estate firms launch two-month discount campaign to revive market

Real estate developers have launched a discount campaign with a lower interest rate to revive the market. The countrywide campaign was announced at a meeting in Istanbul on Aug. 28 with the participation of Environment and Urban Affairs Minister Murat Kurum. The campaign will take place between Aug. 29 and Oct. 31, the minister said, adding that a 10 percent discount would be applied on all properties.“The campaign will cover nearly 100,000 independent structures.  The main theme of the whole campaign will be to make a 10 percent discount in the sale prices of all properties,” Kurum said. The advance payment for each property will not exceed 10 percent of the sale price and a 0.98 percent warrantless interest rate will be applied for a 120-month due, he noted.“Besides, potential homebuyers who pay their advance payment in foreign currencies or gold will not be negatively affected by any parity fluctuations,” Kurum added. Homebuyers will also be able to make interim payments worth of 15 percent of the whole amount in the 12th and 24th months after their purchase transaction, the minister said.
Some 25 percent of the stock properties are expected to be sold during the campaign term, he also noted. Mortgage rates hit over 2 percent in almost all banks. The new campaign will be bank-free. Property sales across Turkey rose 6.9 percent year-on-year in July, while mortgaged home sales saw a 21.2 percent yearly decline, official data showed on Aug. 15. In the first seven months of the year, a total of 769,910 units were sold, almost the same with last year, but the mortgaged home sales were around 232,000 units in the same period with an 18.2 percent yearly decline. Property sales have been increasing since June after they declined for the previous four months in a row, with the help of a similar campaign which was launched ahead of snap elections that month. Three umbrella organizations of 41 Turkish housing and construction companies on May 15 announced that homebuyers would be given a 20 percent discount on house prices in the upcoming month. Down payments for mortgages were also reduced to 5 percent, according to the statement. Turkish banks also slashed mortgage rates to 0.98 percent to back the campaign.

August 28, 2018

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