Message from Minister Şimşek on Inflation: “Inflation is Falling, and Will Fall Further”
simsek antalya
Speaking at the session titled "Global Challenges and Turkey’s Outlook" during the Antalya Diplomacy Forum, Minister of Treasury and Finance Mehmet Şimşek said, “Inflation is falling and will fall further. We’ve done everything to implement this program, there is strong political support, and we are determined.”
At the forum, Şimşek gave a comprehensive assessment of the fragile period the global economy is undergoing and Turkey’s position within this landscape. He emphasized that the global economy is experiencing a time of high uncertainty and volatility. However, he stated that Turkey is relatively more resilient to global challenges and highlighted the reforms underway in foreign trade, energy transition, artificial intelligence, and the defense industry.
Quoting IMF forecasts predicting a 7% decrease in global GDP, Şimşek said, “Trade wars, protectionism, and geopolitical tensions are putting pressure on global production. China dominates global manufacturing, while Europe, the U.S., and Japan are losing strength.”
DOMESTIC DEMAND TAKES PRECEDENCE OVER EXPORTS
Emphasizing that Turkey’s growth model is not export-driven, Şimşek said, “Historically, net exports have not contributed to growth but rather limited it. The main driving force of the Turkish economy is domestic demand and investments.” He added that this makes Turkey less vulnerable to the contraction in global trade.
Şimşek stated that 62% of Turkey’s exports go to countries with which it has free trade agreements, with the EU leading the list. “As long as our relations with these countries continue, a significant portion of our exports will remain protected,” he noted.
Highlighting the importance of regional integration, Şimşek added, “You rise and fall with your neighbor. Turkey wants a peaceful and stable region because that’s in our best interest.”
NEW ENERGY AND LOGISTICS CORRIDORS
Şimşek spoke about Turkey being part of the Middle Corridor that stretches to China and outlined new development corridor projects that will connect Iraq to Turkey, and from there to London and Beijing. Stressing that these projects offer cost-effective and efficient logistics solutions, Şimşek said, “Connectivity is very important. We are investing in peace, security, and prosperity because we benefit from it.”
CLEAR MESSAGE ON FIGHTING INFLATION: “IT’S FALLING, AND IT WILL FALL FURTHER!”
[embed]https://www.youtube.com/watch?v=Ia_KCIM06GA&t=55s[/embed]Reaffirming their commitment to tackling inflation, Şimşek said, “Inflation is falling, and it will fall. We’ve done everything to implement this program. We have strong political support, and we are determined. We also have the capacity to manage this process.” He added that while short-term market volatility may distort expectations, the disinflation process will continue.
He explained that the limited depreciation in the lira could be offset by the drop in oil prices and that tight monetary policy would have clear disinflationary effects. On the fiscal side, Şimşek said budget discipline would be maintained, noting that public debt stands at 25% of GDP.
A RISING POWER IN DEFENSE AND ARTIFICIAL INTELLIGENCE
Şimşek stated that the domestic production rate in Turkey’s defense industry has reached 80%. “Twenty-five years ago, we were among the biggest importers. Now we’re among the top 10 exporters. We have 3,500 companies and 1,100 active projects,” he said.
He noted that artificial intelligence will boost global productivity but won’t benefit everyone equally. Şimşek said Turkey is among the countries producing a high number of graduates in this field. Detailing technology investments in fiber infrastructure, 5G, spaceports, and nuclear energy, he added, “Innovation is born not from choice but from necessity,” and reforms in these areas would continue.
GREEN TRANSITION IS AN ECONOMIC NECESSITY
Şimşek pointed out that large annual budgets are allocated for energy imports and said that renewable energy investments are not just an environmental but an economic necessity for Turkey. He noted that 50% of electricity is currently generated from renewable sources, and they aim to raise this to 70%. He also mentioned that $90 billion has been invested so far in water and irrigation infrastructure.
FOCUS ON FUTURE GROWTH, EMPLOYMENT, AND INVESTMENT
Şimşek said Turkey has grown by an average of 5.3% over the last 20 years and that real GDP has tripled since 2002. “We are not interested in boasting about the past. We want to build a strong future on solid foundations,” he stated. He mentioned that foreign exchange-protected deposits are being reduced, and despite rising CDS premiums, Turkey’s borrowing conditions have now reached the level of other emerging markets.
With the G30 program, they aim to increase high-tech production and attract $30 billion in investments in this area by 2030.
TURKEY ON THE PATH TO BECOMING A RISING GLOBAL HUB
Highlighting Turkey’s prominence in areas from medical tourism to the gaming industry, construction to tea exports, Şimşek said, “Perfectionism is the enemy of progress. We will now focus on what we can realistically achieve.” He noted that $300 billion has already been invested in infrastructure, with another $200 billion planned. He added that Istanbul’s new airport was named the world’s best-connected airport.
Press sources
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