What's Happening?
The Turkish Parliament has passed a new law that suspends the requirement for companies to produce inflation-adjusted accounts for the financial years 2025, 2026, and 2027. This decision follows a period of high inflation in Türkiye, which reached 85%
in late 2022. The move is part of a broader shift towards more conventional economic policies aimed at achieving disinflation and price stability. The regulation also grants the president the authority to extend this suspension for an additional three years if necessary. The Banking Regulation and Supervision Agency (BDDK) has also decided that banks and other financial institutions will not apply inflation accounting during this period.
Why It's Important?
This legislative change is significant as it reflects Türkiye's ongoing efforts to stabilize its economy after a period of high inflation. By suspending inflation accounting, the government aims to simplify financial reporting and potentially attract more investment by presenting a more stable economic environment. This move could have implications for international investors and businesses operating in Türkiye, as it may affect financial transparency and the perceived economic health of the country. The decision also highlights the government's commitment to conventional economic policies following recent elections, which could influence future economic strategies and international economic relations.
