4/18/2024
Disclosures Made by Treasury and Finance Minister Mehmet Şimşek
Treasury Minister Şimşek: “The most significant challenge in the short run is high inflation; curbing it is our priority target. We want to see that inflation comes down to single digit figures until 2026. Inflation rate expectations of the market are around 36% for the next 12 months. We are decisive to make the Turkish economy carbon free”…
Treasury and Finance Minister Mehmet Şimşek commented on the Turkish economy during the Global Outlook Forum held by the International Institute of Finance (IIF) in Washington where he went to participate in the World Bank – IMF Spring Meetings. Şimşek stating that the Medium Term Program (OVP) has a “powerful and reliable” framework, spoke as follows “The program aims to reinstate price stability and public finance discipline and to tackle several other challenges such as the reduction of the current account deficit. The ultimate target is a sustainable high growth rate and welfare for all. The most significant challenge in the short run is high inflation. We will continue to support efforts of the Central Bank to fight against inflation with our fiscal policies.” Şimşek stating that the main purposes of the program are to enhance competitiveness and efficiency besides structural reforms, said that they have taken serious measures to reduce the deficit reminding that earthquakes that occurred last year resulted with an enormous deficit. Şimşek stating that the recovery in growth expectations in main trading partners of Turkiye will support foreign demand, said “The current account deficit narrows beyond our program targets.” “Reducing inflation is our priority target” Şimşek making the statement “reducing inflation is our priority target” and noting that the monthly inflation has slowed down and the annual inflation rate will start to come down as of the second half of the current year, spoke as follows: “We want to see that inflation comes down to single digit figures until 2026; we will start implementing quite extensive structural reforms until then. The viewpoint of investors towards Turkiye has changed compared to last year. They had concerns last year regarding a retreat from orthodox policies and a possibility of failing to implement the program. Almost no questions were asked on the matter this year. There are now questions rather on the details of the program but not on its continuation. We will strengthen the program even further and will step up structural reforms with future prospects.” Şimşek also made the following statement: “There is high interest in Turkish assets. We have to convince the people that the inflation rate will come down. Inflation rate expectations of the market are around 36% for the next 12 months. There are no elections in Turkiye until June 2028. This will provide quite a long time for political stability to achieve the program targets. The Turkish economy is resilient. There is a viable private sector in the country and a strong entrepreneurial culture. Turkiye has its advantages in the long run when compared to its peers. Global indebtedness is a factor cutting your speed for growth. The proportion of Turkiye’s debts to the gross domestic product is somewhat lower than the average figure for developing countries.” “We are decisive to make the Turkish economy carbon free” Şimşek pointing out that green transition is one of the major priorities of Turkiye, said that 55% of the installed power was represented by wind, solar and hydro energy last year and the nuclear power plant will also be on the scene which is under construction. Şimşek pointing out that the dependence on fossil fuels is declining steadily, said “We are decisive to make the Turkish economy carbon free by means of investments that will help enhance competitiveness and productivity targeting green transition.”
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