Şimşek: No Decline in Political Support for the Program

Turkish Finance Minister Evaluates Economic Program and Global Engagements

Turkish Treasury and Finance Minister Mehmet Şimşek appeared on a joint broadcast by Bloomberg HT and Habertürk to evaluate the latest developments.

Şimşek stated that no change is needed in the current economic program and emphasized:

“Reducing inflation has been and remains our primary priority, independent of domestic developments.”

Key Highlights from Şimşek’s Remarks

1. International Meetings and Investor Engagements

“The meetings we attended included the G-20 meetings. They were quite productive.”

• In New York, Şimşek met with top executives of credit rating agencies.

• Held three intensive one-hour meetings with the agencies.

• Also met with investors.

• Totaled around 60 meetings, including New York and Washington.

• Delivered speeches at 7–8 global investment conferences.

• According to his team, they reached nearly 2,000 individuals.

Şimşek: No Decline in Political Support for the Program

2. Resilience of the Economic Program and Political Support

Şimşek identified four main themes in investor meetings:

• Resilience of the economic program against domestic developments.

• Discussions included structural transformation and disinflation.

• He stated:

  “Political support for the program is quite high. We will continue doing whatever is necessary.”

3. Global Uncertainties and Turkey’s Economic Resilience

• Investors asked how Turkey would withstand global uncertainties.

• The most common word at official meetings: “uncertainty”.

• Global growth is expected to fall below 3%, leading to capital outflows from risk assets.

• Countries like Turkey are more affected by shrinking risk appetite.

  “We already experienced this—foreign investors’ share in domestic debt has halved.”

Despite this, Şimşek emphasized Turkey’s relative independence from external demand:

• Turkey’s economy is driven by domestic demand and investment, not net exports.

• This provides greater resilience to global uncertainty.

• While short-term growth may slow, medium-to-long-term prospects remain strong.

Export Advantage and Regional Positioning

• Most of Turkey’s exports go to rule-based and geographically close countries.

• Once volatility subsides, Turkey will be seen as advantageous.

• The 10% U.S. tariff on Turkey is relatively low, offering a price-independent advantage.

• Şimşek claimed:

  “Demand for Turkey will emerge during times of disruption—we’re already hearing it.”

• Asian investors are expected to turn to Turkey, with ongoing discussions.

• Strengthening regional integration (especially with the EU and Balkans) is key to fighting global protectionism.

4. Falling Commodity Prices and Impact on Turkey

• The decline in commodity prices is seen as highly beneficial for Turkey.

• It helps reduce inflation and narrow the current account deficit.

Macroeconomic Outlook: Inflation, Monetary Policy, and Confidence

Inflation and Monetary Tightening

• Investors questioned the macroeconomic program’s robustness amid recent developments.

• Şimşek reassured:

  “Inflation will remain within the Central Bank’s target path.”

• While there’s limited deterioration in expectations and some lira depreciation, the drop in oil prices provides a clear disinflationary effect.

• The program has responded by tightening financial conditions, which will:

  “Bring inflation down. We have no doubt about it.”