Statement from Minister Şimşek: Disinflation Process Halted But We Are Not Giving Up
Treasury and Finance Minister Mehmet Şimşek stated that war-induced energy supply shocks have halted the disinflation process, but economic program and fiscal discipline will not be compromised.
Treasury and Finance Minister Mehmet Şimşek stated that the disinflation process in the Turkish economy halted this year due to the war, but emphasized that the economic program has not been abandoned and that price stability and fiscal discipline will be maintained with determination.
The Impact of War on the Disinflation Process
Treasury and Finance Minister Mehmet Şimşek evaluated recent developments in the Turkish economy at the opening of the "Strategic Outlook in the Global Economy" meeting. Şimşek stated that this year the disinflation process paused due to the war, but that they are not giving up.
Medium-Term Program and Priorities
Stating that the main goal of the Medium-Term Program is to ensure price stability, Şimşek said this continues to be the top priority. Şimşek noted that they also possess fiscal discipline and will continue to maintain it.
Energy Supply Shocks and Fiscal Buffers
Expressing that the biggest challenge in the short term is the energy supply shocks caused by conflicts, Şimşek stated that this situation creates higher inflation and tighter financial conditions. Şimşek emphasized that Turkey has built fiscal buffers to overcome such shocks.
Indebtedness and Budget Indicators
Conveying that Turkey is in a relatively good position among emerging countries in terms of indebtedness, Şimşek stated that debt is low and fiscal space exists. He reported that the budget deficit is below 3 percent and the ratio of debt to national income is at the level of 22 percent.
Defense and R&D Investments
Noting that Turkey is investing heavily in defense, Şimşek announced that defense expenditures will be increased by 229 percent in the 2027 budget. Şimşek conveyed that Turkey has become one of the world's top 10 defense exporters and that this sector holds a value of over 100 billion dollars.
Energy Security and Renewable Sources
Stating that the fundamental issues in energy and supply security are accessibility and affordability, Şimşek expressed that investments are being made in pipelines and renewable energy. He said the share of renewable energy is at 60 percent and the electrification target is 35 percent.
Trade Agreements and Tourism Targets
Stating that free trade agreements have been expanded against protectionism and that 54 agreements have been made, Şimşek added that tourism revenues have increased 9-fold in dollar terms over the last 25 years and that the target is to double this revenue.