Minister Şimşek's message on inflation: We are determined to implement the disinflation program.

18.04.2025 11:00

The Minister of Treasury and Finance, Mehmet Şimşek, made statements about inflation via videoconference at the International Economy Summit. Şimşek stated, "We are determined to implement the disinflation program. There has been a limited depreciation of the lira, but we expect low exchange rate pass-through."

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Minister of Treasury and Finance Mehmet Şimşek sent a message to the International Economy Summit via video conference. Providing messages regarding inflation, Şimşek stated, "We are determined to implement the disinflation program."

Here are the highlights from Minister Şimşek's statements:

"TURKEY IS IN A MORE RESILIENT POSITION"

I would like to address protectionism, known as trade wars. Uncertainty in global economic policies has increased more than ever. Trade restrictions have risen 11-fold. In the post-global financial crisis period, growth in global trade has lagged behind global growth. If trade wars continue in this way, there is a high probability that global growth will fall below 3%. Today, more than 30% of the world's manufacturing value added is produced in China.

Turkey is in a more resilient position compared to similar countries. The main driver of growth is domestic demand. In a world order that is closing in on itself, Turkey's level of impact may be relatively limited. We conduct a large part of our trade with friendly and neighboring countries. The EU defends a rule-based trading system like ours, which makes us more resilient to external shocks. The relatively low tax imposed on Turkey offers an advantage compared to our competitors in Asia.

"CRISIS CONTAINS SIGNIFICANT OPPORTUNITIES"

The population in Turkey has started to age, but we believe there is at least a 15-20 year window of opportunity. We see that global defense spending is increasing. It has doubled in the last 25 years, reaching $2.4 trillion. The EU has relaxed fiscal rules to allocate up to 800 billion euros in the next 4 years. The increase in global defense spending presents opportunities for Turkey.

There are serious structural problems in the world, but Turkey is in a more advantageous position. Our goal is to permanently reduce inflation to single digits, create space in the budget for reforms, and achieve structural transformation by increasing productivity and potential growth. Inflation will continue to decrease. We are determined to implement the disinflation program. The Turkish lira has experienced limited depreciation, but we expect low exchange rate pass-through. Tightening financial conditions are disinflationary. We will not compromise on spending discipline. By keeping expenditures under control, we will support disinflation. We are now approaching the threshold where we can grow without running a current account deficit. The decline in oil prices implies a current account deficit below program targets.

Last year, we provided employment for one million people. Recent fluctuations in the markets may cause a temporary slowdown. We are establishing solid foundations for high growth. We have strong reasons to be optimistic. The crisis contains significant opportunities.