Finance and Finance Minister Şimşek made statements on the global and Turkish economy at the British public meeting organized by the International Union of Democrats (UID) in London.
Stating that we are in a time when the world is facing great uncertainties, Şimşek stated that there is a great tendency towards protectionism in world trade.
“There is great geostrategic competition in the world”
Stating that countries such as the United States, the European Union (EU) and Japan are losing ground in the manufacturing industry, Şimşek continued his speech as follows:
“There is a great geostrategic competition in the world. This is the reason for today's ruptures. Türkiye has an advantage here. 62 percent of our trade is with the countries with which we have a free trade agreement, and more than 80 percent is with these two countries and our close geography, that is, with the countries with which we are friends. We are neither insensitive to what is happening, nor are we completely protected. But relatively speaking, our country will be more resilient in these ruptures. The Türkiye does.” In a tremendous preparation for these major developments and ruptures in the world, we are now particularly “We have emphasized integration with our neighboring region with a terror-free Türkiye, because if there is an increase in stability, peace and prosperity in our region, Turkey is the country that will benefit the most.”
Explaining that Türkiye is trying to create an opportunity, Şimşek stated that defense spending would exceed $6 trillion in the 2030s and that “there is no reason to be pessimistic if you are prepared.”
Şimşek pointed out that a green transformation is a necessity for the Turkish economy: “Turkey has paid a trillion dollars for importing fossil fuels such as natural gas and oil in the last 24 years. Our total debt is less than 550 billion dollars. In other words, we have paid an amount that is twice our total debt for importing fossil fuels.” he said.
In this context, Şimşek emphasized that renewable energy transformation is accelerating in Turkey.
“Inflation will fall below 20 percent next year”
Emphasizing that with the macroeconomic stability and reform program they are currently implementing, Şimşek aims to make Türkiye grow much stronger and faster, saying: “Our low debt will make a great contribution to realizing industrial, digital and green transformation. Therefore, Türkiye's future is really bright in this regard and the potential is great.” he said.
Şimşek stated that the Türkiye's share of world national income has already doubled since 2002 from 0.7 percent and continued his words as follows:
“We are negotiating a much more advanced free trade agreement with the UK. We are in the final stages of negotiating a very comprehensive free trade agreement, which will cover not only industrial goods, but also services, public procurement and agricultural products. Likewise, our trade with the EU is expected to rise to $230 billion this year. We are the EU's fifth largest trading partner outside the EU. We want to expand our relationship with the EU even further and strive for significantly greater economic integration.”
Pointing out that Türkiye's priority now is to ensure price stability, Şimşek said: “So our goal is to bring inflation back to single-digit percentages,” he said.
“We have reached the desired point in the budget”
Stating that budget deficits are a big problem worldwide and that Türkiye has also gone through a big test, Şimşek shared the information that about $90 billion has been spent in the earthquake zone so far.
Recalling that 350,000 of the approximately 600,000 houses in the earthquake zone have been completed and 500,000 social houses will be built, especially to reduce rental inflation, Şimşek said, “The public has really provided important discipline in spending. In particular, the spending under the austerity circular was the demand of our citizens. In the past, the ratio of the expenditure under the austerity circular to the budget was 4.6 percent.” He pointed out the following:
“We have now reduced this to around 3 percent. In other words: We have reduced these current expenses by almost 30 percent compared to the budget.
Şimşek noted that Türkiye's risk premium has fallen to below 240 basis points from 700 basis points in mid-2023.
Stating that there is still a lot to be done but significant progress has been made, Şimşek concluded his words as follows:
“Intense work is underway on issues such as raising Türkiye's democratic standards and strengthening the rule of law. 2026 will be the year of reforms, as our President said, because we do not want our achievements to be temporary. For our achievements to be permanent, they must be supported by structural change and structural reforms. This year our country is likely to be included in the group of high-income countries as defined by the World Bank. What is important is that we make much further progress with reforms.”
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