Treasury and Finance Minister Şimşek's Evaluation of Fund Markets and the Economy
Treasury and Finance Minister Mehmet Şimşek announced that troubled structures in the fund markets have been quarantined and liquidation processes initiated, emphasizing that there is no systemic risk.
Treasury and Finance Minister Mehmet Şimşek evaluated developments in fund markets at the Global Emerging Markets Conference organized by S&P Global. Şimşek emphasized that troubled portfolio management companies and funds have been quarantined and liquidation processes initiated, stating that there is no systemic problem in the market.
Developments in Fund Markets
Treasury and Finance Minister Mehmet Şimşek stated that they acted very quickly against the problems experienced in the fund markets. He conveyed that troubled portfolio management companies and related funds were quarantined and a liquidation process was initiated.
Noting that these current steps aim to stop contagion from spreading to the rest of the system, Şimşek emphasized that they have been largely successful in this regard and that there is no systemic problem.
Geopolitical Risks and Global Trade
Stating that they are passing through one of the most complex geopolitical environments of recent decades, Şimşek expressed that fragmentation in trade is the baseline scenario and supply chains are being re-established along security axes.
Reminding that Turkey is an open economy dependent on energy imports, Minister Şimşek noted that they have built strong buffers against these shocks and continue stable policies.
Regional Cooperation and New Routes
Noting that the Mecca Joint Defense Agreement between Turkey and Saudi Arabia marks a new era in regional relations, Şimşek stated that the region needs new and reliable energy and trade routes.
He noted that thanks to its infrastructure, Turkey is in a very good position to connect Gulf Cooperation Council countries to Europe and China, and that the Middle Corridor plays a critical role in this process.
Economic Growth and Budget Targets
Stating that they project the Turkish economy to grow by around 3 percent this year, Şimşek said that the current account deficit to national income ratio might be slightly above expectations, but all these elements are at manageable levels.
Expressing that high energy prices pose a challenge for all energy-importing countries, the Minister emphasized that budget performance is strong relative to targets and that the direction of the economic program will not change.
Inflation Expectations and Political Stability
Drawing attention to several factors that will shape inflation over the next 12-18 months, Şimşek conveyed that core goods inflation is hovering below 16 percent.
Stating that according to CBRT calculations, inflation would have been approximately 7 points lower had there been no war, Şimşek noted that early election speculations are completely groundless and that there will be no room for populist deviations.