Vice President Cevdet Yılmaz said, “I believe that with the establishment of trust in Syria and the improvement of the economic and political environment, our Syrian brothers will return to their country, homeland safely, honorably and voluntarily.” he said.
Yılmaz made the introduction speech of the 2025 Central Government Budget Law Proposal and the 2023 Central Government Final Account Law Proposal, the discussions of which started in the General Assembly of the Turkish Grand National Assembly.
Yılmaz, who started his speech by wishing God’s mercy for the soldiers who were martyred in the helicopter crash that occurred during a training flight in Isparta and a recovery for the injured, said that research and investigations regarding the accident will be carried out in the process.
Making evaluations about the developments in Syria, Yılmaz stated that we are at a historical turning point in Syria and that they are following this entire process closely and said:
“Currently, a new formation has begun, there is a transition period. We hope that this transition period will be formed and continue in the healthiest and most inclusive way. All religions, all ethnic groups, all sects living in Syria, all Syrian people are represented. We hope that a process will take place and that a permanent regime will be formed in Syria, including all these elements, in a way that will protect Syria’s territorial integrity, political unity and sovereignty.
I would like to express that, as the Republic of Türkiye and the Turkish people, we stand by Syria and all the Syrian people. We will continue our solidarity with the Syrian people, as we have done so far. The Syrian people suffered a lot. We hope that there will be no action or impact from the outside that will negatively affect these processes taking place in Syria. “We hope that peace, stability and tranquility will be ensured in Syria.”
Yılmaz emphasized that they will continue to take all kinds of measures to eliminate terrorist threats from Syria to Turkey and to prevent Turkey from being exposed to threats from its people, borders and neighbors:
Yılmaz said:
“Another important dimension is the population that came from Syria and is under temporary protection in our country. I believe that by establishing trust in Syria and improving the economic and political environment, our Syrian brothers will return to their country, homeland in a safe, honorable and voluntary manner. With the experiences they have gained in this process, “I believe that with the achievements they have made, they will create a strong bridge and a positive bond between our country and Syria.”
“OUR ECONOMY HAS BEEN GROWING UNINTERRUPTED FOR 17 QUARTER”
Stating that the 2025 Central Government Budget Law Proposal was prepared in accordance with macroeconomic and financial stability and fiscal discipline policies, and that they aim to keep public expenditures under control, except for earthquakes, Yılmaz noted that the public deficit will be gradually reduced and the disinflation process will be supported.
Yılmaz explained that the 2025 budget is also compatible with the “Turkey Century” vision and that it was created with an approach that will support the structural transformation steps planned to be implemented in many areas, and added that technological developments will be aimed at increasing high value-added production, strengthening R&D and innovation capacity, and transitioning to a green and digital economy. He said that it will be supportive of policy steps towards ensuring transformation and improving supply security in food and energy.
Stating that they believe that positive supply-side expectations in commodity prices, especially in the field of energy, will move in a direction to support economic activity in 2025, Yılmaz noted that they expect the supportive environment in external conditions to support the disinflation, employment, production and export targets of the resolutely implemented economic program.
“WE ARE PLANNING TO REACH HIGH GROWTH RATES IN A STABLE ENVIRONMENT”
Yılmaz stated that the Turkish economy continues its convergence process with developed countries with its strong growth performance and continued as follows:
“We observe that our country continues to grow in a balanced structure in 2024, despite the negativities in global economic conditions, especially in Europe, and the increasing geopolitical developments in our region. Our economy, which recorded a growth of 2.1 percent in the third quarter of 2024, has been growing uninterruptedly for 17 quarters. In the first nine months of 2024, domestic The Turkish economy grew by 3.2 percent, with a significant contribution from demand, net exports and the service sector.
As of the third quarter of the year, the balanced growth composition continues, and as we predicted in the MTP, the contribution of net exports of goods and services to economic growth comes to the fore. The contribution of net exports of goods and services to economic growth increased in the third quarter of the year and reached 2.2 points. In addition, construction investments accelerated and their contribution to growth was 0.8 points. In our growth target of 3.5 percent in the MTP for the whole of 2024, downside risks have increased due to the temporary effects of global economic conditions and disinflationary policies. However, in this process, we will continue to move determinedly towards sustainable growth, with our economy displaying a growth performance close to the target. In the medium term, we plan to achieve higher growth rates in a stable environment with the impact of our economic policies with increased predictability.
“For 2025, it is aimed for our economy to have a balanced outlook in terms of production and demand, reaching a growth rate of 4 percent with the support of net exports and fixed capital investments that make growth sustainable.”
“WE AIM TO ENSURE THE TRANSITION TO PERMANENT PRICE STABILITY”
Emphasizing that the focus of the policy components they created to ensure macroeconomic stability is the fight against inflation, which is on the agenda of the whole world, Yılmaz said:
“In line with the calendar and phasing we determined in the MTP we announced last year, the transition process, which started in June 2023 and aimed to create a solid basis in the fight against inflation, ended as of June 2024 and the disinflation process, which is the second stage, started. As of this date, the annual A 28.4-point decrease was recorded in the inflation rate, and the annual CPI increase rate decreased to 47.1 percent as of November 2024.
Together with the price developments in December, we expect that the inflation rate at the end of 2024 will be in line with the forecast range stated by the Central Bank in the Inflation Report announced in November. Similarly, in 2025, the fight against inflation will be carried out in line with the determined stance we have taken, with the inflation rate in line with the levels declared in the MTP and the Inflation Report.
The downward trend in inflation, tight monetary policy, macroprudential measures and the stable course of the Turkish lira show that the disinflation process has begun to be effective. “As this trend continues in the coming period, we aim to successfully complete the disinflation process, see single-digit inflation levels again, and thus ensure the transition to permanent price stability.”
Yılmaz continued his words as follows, emphasizing that their main goal in achieving strong growth in stability and improving income distribution is primarily to ensure price stability.
“We are making every effort and taking the necessary steps to ensure that the decline in inflation levels permanently improves the welfare level of our citizens. We continue to work to ensure that the decline in inflation is established as soon as possible, to further improve expectations and to ensure that pricing behavior is disinflation-lowering. In this regard, the inflation rate program “We will use monetary, fiscal and income policy components and all our tools decisively within an integrated policy framework and with effective coordination until we stabilize at these levels.”
“EXTERNAL FINANCE COSTS HAVE DECREASED QUITE”
Stating that the tight monetary stance was maintained by the CBRT and supported by quantitative tightening and macroprudential policies, Yılmaz stated that as a result, an improvement was observed in the inflation expectations of consumers and companies.
Yılmaz stated that according to the data dated November 29, KKM’s share in total deposits decreased to 6.6 percent from its highest level of 26.2 percent last year, the share of Turkish lira deposits increased to 57.3 percent, and deposit dollarization increased to 6.6 percent. He said that it fell to 36.1, reaching its lowest level since 2015.
“In the last year, the need for foreign currency has decreased due to reasons such as rapidly increasing reserves, rapidly decreasing current account deficit and increased refinancing of external debt, and external financing costs have decreased considerably as the country risk premium has been reduced to a significant level.” Yılmaz noted that, as in the public debt, the refinancing risk of the financial sector and the real sector on the debt has decreased significantly due to reasons such as confidence in the macrofinancial stability target and falling costs.
“THE SHARE OF INTEREST IN OUR BUDGET IS AT 13.2 PERCENT”
Yılmaz stated that this year’s central government budget expenditures will be 11 trillion 213 billion liras and budget revenues will be 9 trillion 65 billion liras, and that they estimate this year’s budget deficit to be 2 trillion 148 billion liras and the non-interest deficit to be 851 billion liras, by the end of this year. He noted that they expect the budget deficit to national income ratio to decrease to 4.9 percent, a much lower level than the initially anticipated 6.4 percent.
Stating that they estimate that tax revenues will be approximately 7 trillion 605 billion liras and non-tax revenues will be approximately 1 trillion 459 billion liras, Yılmaz said:
“In the 2025 Central Government Budget, we predict that budget expenditures will be 14 trillion 731 billion liras and budget revenues will be 12 trillion 800 billion liras. The ratio of the budget deficit to gross domestic product is expected to be 3.1 percent. The incidental, temporary increase in budget deficits due to the earthquake Afterwards, we bring the budget deficit back closer to the average during our governments.
By ensuring financial discipline during our governments, we transformed the budget from an interest budget into a service budget. While the share of interest expenditures in GDP was 14.3 percent in 2002, it is estimated that this rate will be 3.2 percent in 2025. In 2002, the share of interest in all our budget expenses rose to 43.2 percent. “At today’s point, although there are some temporary increases, the share of interest in our budget is around 13.2 percent.”
“WE ESTIMATE THAT TAX REVENUES WILL REACH 11 TRILLION 139 BILLION LIRAS”
Yılmaz gave information about the distribution of 2025 budget appropriations according to economic classification, stating that personnel expenses are 3 trillion 911 billion lira; 1 trillion 24 billion lira of goods and service purchase expenses, 5 trillion 813 billion lira of current transfers, 1 trillion 102 billion lira of capital expenditures, 338 billion lira of capital transfers, 306 billion lira of lending expenses, 306 billion lira of reserve appropriations. He reported that 287 billion liras and interest expenses were 1 trillion 950 billion liras.
“We estimate that central government budget revenues will reach 12 trillion 800 billion liras and tax revenues will reach 11 trillion 139 billion liras in 2025.” Yılmaz said, and in the sub-items of budget revenues, income tax is 2 trillion 130 billion lira, corporate tax is 1 trillion 637 billion lira, value added tax is 3 trillion 599 billion lira, special consumption tax is 2 trillion 121 billion lira, other tax revenues. He said that 1 trillion 652 billion lira and non-tax revenues were 1 trillion 662 billion lira.
