Turkish Treasury and Finance Minister Mehmet Şimşek has forecasted a significant decline in inflation for August, mirroring the sharp drop observed in July.

Şimşek described the recent volatility in global markets as akin to a temporary panic attack. He noted that inflation surged rapidly following the pandemic, but subsequent policy responses managed to stabilize the situation. Despite the slow global economic growth, a recession was avoided, and robust growth in the United States is expected to continue.

Şimşek acknowledged that while a slowdown in global growth could negatively impact risk appetite, leading to potential challenges for Türkiye, it also has positive implications. Specifically, declining oil and commodity prices are expected to benefit Türkiye by reducing the current account deficit and easing inflation pressures.

He also observed that recent market movements, including anticipation of faster interest rate cuts by the Federal Reserve, are likely to ease global financial conditions. This trend could positively affect developing countries like Türkiye by potentially enhancing the flow of funds.

Şimşek reassured that Türkiye's exposure to foreign risks is manageable, with a significant but relatively low concentration risk compared to previous periods and other nations. (ILKHA)