Türkiye’s Economic Program Proves Resilient Amid Dual Shocks, Says Finance Minister
Mehmet Şimşek
Türkiye’s economic roadmap has passed a major credibility test, according to Finance Minister Mehmet Şimşek, who stated the program successfully navigated two consecutive shocks — first a domestic disruption in March, followed by an external shock in April.
Speaking in an exclusive interview with NTV on June 12, Şimşek highlighted the resilience of the program:
“A program that has managed to withstand two major shocks back-to-back has strengthened Türkiye’s economic structure and increased its resilience.”
Market-Friendly Approach Mitigated Capital Flight
Şimşek explained that while significant capital outflows occurred during this turbulent period, a large portion of those funds has already returned.
“This shows that confidence in the program remains,” he emphasized.
He added that the situation was handled with a market-friendly policy stance, allowing for recovery without triggering instability.
Gross Reserves Recover After Initial Drop
The gross reserves, which initially fell from over $170 billion to below $140 billion, have since rebounded to approximately $154–155 billion, Şimşek confirmed.
He also pointed to key market indicators — such as a drop in Türkiye’s CDS spreads and lower yields on two-year Treasury bonds — as further evidence of improved investor confidence.
“Interest rates and the country risk premium are falling, reserves are increasing, and the exit from FX-protected deposits (KKM) continues. It’s clear that the program has proven itself. It is on track,” Şimşek stated.
Inflation Expected to Continue Decline Through 2025
The minister also shared an optimistic outlook on inflation, stating that financial conditions would remain tight and that Türkiye has entered a phase of persistent disinflation.
“We are in a period of a lasting decline in inflation,” he said.
According to recent data, annual inflation in May eased to 35.4%, with monthly consumer prices rising by 1.5%. Şimşek projected that inflation would fall further,
“Inflation will continue to decline, and it will be around the 20s at the end of this year.”
