Turkish economist: Why Mehmet Şimşek Fell Short: A Data-Based Look at Turkey’s Missed Economic Targets

Summary:

The debate over who truly shapes Turkey’s economy — Vice President Cevdet Yılmaz or Finance Minister Mehmet Şimşek — is heating up. While political success is often credited to the presidency and Yılmaz, shortcomings are increasingly associated with Şimşek. A review of Turkey’s Medium-Term Program (OVP) targets versus actual results shows significant slippage in exports, imports, growth-driven employment targets, and — most critically — inflation.

Author Ibrahim Kahveci

The OVP Promises vs Reality

In September 2023, after returning to office, Şimşek announced the 2024–2026 Medium-Term Program with ambitious goals.

Official Targets (OVP):

Where things stand now:

• Current annual exports: $270.6bn
  → Target requires $36.4bn in December alone — unrealistic

• Current annual imports: $361.9bn
  → Still $27bn short of year target

Bottom line: Economic activity underperformed projections.

Employment Signals the Slowdown

• Employment target for 2025: +912,000 jobs

• Actual change: –1,000 jobs (net decline)

The government now frames 3.5% growth as a success, but the underlying composition appears too weak to lift employment.

Inflation: The Biggest Deviation

When Şimşek took office in June 2023, inflation was 38.21%.
Today it stands at 31.07% — a decline of just 7 points in 2.5 years.

But achieving that reduction came with trade-offs:

• FX suppressed:
  Lira should be ~66.85 TL per USD today based on real price movements — instead ~42 TL
  → Roughly 58% currency suppression

• Oil advantage: Brent fell from $75 to ~$63

• Official inflation credibility gap widened:

Analysts call this the period of “suppressed inflation reporting.”

Did Şimşek succeed or fail?

He failed to meet growth-employment-trade targets
He barely reduced inflation in real terms
He relied heavily on FX suppression to manage optics

But — he prevented a balance of payments crisis.
Many economists credit Şimşek with averting a full financial collapse, even if at significant cost.

Structural Obstacles Beyond Şimşek

The article argues that core challenges are political, not just technocratic:

Risk factors that undermined the reform path:

1. Presidential power concentration & unpredictability

2. Post-March 19 political interventions

3. Pressure from lobby interests & “palace barriers”

4. Unwillingness to challenge oligarchic contractors

As a result, tax burden shifted downward:

“He couldn’t touch the wealthy — instead taxes hit waiters’ tips and couriers’ wages.”

The Verdict

Şimşek slowed inflation marginally and bought time — but at the expense of real incomes, FX stability, and statistical confidence.
Without structural reform and political backing, lasting success was always unlikely.

It wasn’t just an economic problem — it was a system problem.

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