Türkiye’s recently appointed Treasury and Finance Minister Mehmet Şimşek said the program of Türkiye’s new economic team is focused on fiscal discipline, gradual monetary tightening, and structural reforms.

He also signaled further rate hikes this year in a bid to tame inflation.

“Our program has three key components,” Şimşek posted on Twitter, listing them as: “Restoration of fiscal discipline; that is, reducing the budget deficit to a level compatible with the Maastricht criteria, excluding the effect of earthquakes (from this February); gradual monetary tightening and incomes policy in line with the inflation target in order to reduce inflation to single digits in the medium term; (and) structural reform that will make macroeconomic financial stability and all other gains permanent.”

Consumer price inflation in Türkiye moderated further in June as the downward trend continues at a slower pace.

Prices climbed 38.21% last month compared with a year earlier, down from May’s 39.59% year-over-year increase, due in part to base effects, according to the Turkish Statistical Institute (TurkStat) data.

The June reading marks the lowest level since December 2021, when inflation stood at 36.08%, before rising to above 85% in October 2022, a 24-year high.

The annual reading recorded more than a 4-point drop in May after Ankara’s provision of free natural gas that month offset other price rises.

Prices increased 3.92% from May to June, TurkStat said, its highest level since January, after a steep decline in the Turkish lira. It is up sharply from a 0.04% rise from April to May.

Annual and monthly figures both came in below market expectations. A median of estimates in a Reuters poll predicted inflation would reach 4.84% month-over-month. The poll had forecast that annual consumer price inflation (CPI) would be 39.47% and is expected to end the year at 51.5%.

Türkiye’s economic authorities have taken steps since President Recep Tayyip Erdoğan was reelected on May 28 to combat inflation, including changing course after two years of monetary easing.

Erdoğan reshuffled his economic team after reelection, bringing in Şimşek, the respected veteran policymaker, as treasury and finance minister, and Hafize Gaye Erkan, a former Wall Street banker, as central bank governor.

The Central Bank of the Republic of Türkiye (CBRT) increased its benchmark policy rate by 650 basis points last Thursday, lifting its one-week repo rate to 15%, and called it the “first step” to curb inflation.

The decision was taken during the meeting that was first under the helm of Erkan.

Şimşek, meanwhile, has several times reiterated Türkiye’s commitment to curb price increases and ensure financial stability.

“The path toward price stability is going to be gradual but steadfast,” he said after the central bank decision.