According to the compilation from the OVP covering the period 2025-2027, the program aims to achieve price stability by reducing inflation to single digits in the medium term with policies appropriate to the disinflation process, managed prices and supply-side policies.
In this context, financial stability will be strengthened to support the fight against inflation. Inflationary inertia will be broken and supply-side sources of inflation will be combated more effectively.
POLICY COMPOSITION SUITABLE FOR THE DISINFLATORY PROCESS
The policy mix that will ensure the disinflation process will be maintained. All tools will be used to contribute to the fight against inflation until inflation declines to the desired path.
In order to establish permanent price stability, the application of inflation targeting will continue. While the Central Bank will use all policy tools effectively in the fight against inflation, the coordination of fiscal and income policies with monetary policy will continue.
The floating exchange rate regime will continue to be implemented. Except for unhealthy price formations or excessive volatility, exchange rates will be formed according to the balance of supply and demand.
MANAGED GUIDED PRICES
Inertia in inflation will be addressed from a holistic perspective. Rigidity in prices will be combated through more effective management of inflation expectations.
The prices that are managed will be increased in line with the inflation estimates and targets in the OVP. The compatibility of the minimum wage increases aimed at preventing the wage-price spiral with the disinflation process will continue to be observed.
Purchase prices of agricultural products will be determined in a way that will help reduce the indexation behavior to past inflation, taking into account their impact on public finances, market dynamics and Program targets.
In order to eliminate distortions in pricing behavior, the backward indexing mechanism will be reduced in the service sectors, especially in the retail sector. Transparency and competition-oriented practices will be expanded.
SUPPLY SIDE POLICIES
By increasing production capacity and supply security in all sectors, especially agriculture, the sensitivity of inflation to incidental shocks will be reduced.
In order to ensure stability in food prices and security of supply, target sufficiency rates for strategic agricultural products will be determined and production planning will be implemented, taking into account the productivity of the land as well as rainfall and irrigation opportunities.
In order to monitor and evaluate the possible effects of short and long-term supply-demand and export-import changes in food and agricultural products and developments in the distribution chain on prices with an early warning approach and to support price stability, timely fiscal and foreign trade policies will be implemented in coordination with the relevant institutions.
In order to support price stability in agricultural products within the free market order, a Food and Agricultural Products Stock Tracking System will be established for certain products and traceability will be ensured in food product warehouses.
In order to encourage, sustain and manage agricultural production, agricultural incentives and supports will be announced in advance to guide production decisions and payments will be made on time.
Taking into account the developments in rents and housing prices, new social housing projects will be developed to compensate for the losses in the housing stock caused by the earthquake, and low-income citizens’ access to housing will be increased.
The transfer of all short and long-term real estate lease contracts to a certain standard will be completed to the digital platform.
