Nuran Erkul Kaya
14 May 2025•Update: 15 May 2025
LONDON / ISTANBUL
Türkiye's Treasury and Finance Minister Mehmet Simsek stated Wednesday that Türkiye's economic program continues with determination and that inflation is on a downward trend.
Simsek gave a presentation on the Turkish economy in London at the session, titled "Türkiye’s economic transformation and growing investment potential," held as part of the annual meetings of the European Bank for Reconstruction and Development (EBRD).
"The economic program is on track, working, and delivering. The essence of our Medium-Term Program is achieving price stability and we are making good progress on this issue. Inflation has fallen from a peak of 75% to about 38% and we see inflation trending down," he said.
"The recent turbulence has raised some questions about market expectations. But financial conditions are tighter and highly likely disinflationary. Falling oil prices are contributing to disinflation. Inflation is on a downward path. Economic growth could turn out to be a bit slower, but we can live with that. The labor market is pretty tight, unemployment rate is at a 20-year low," Simsek noted.
Simsek stated that Türkiye is a large market with a population of 86 million and $1.3 trillion and the national income per capita was more than $15,000 last year.
He emphasized that Türkiye's economy grew by an average of more than 5% on an annual basis between 2003 and 2024.
Emphasizing that they have laid the foundations for long-term growth and implemented structural reforms, Simsek noted that Türkiye's debt-to-GDP ratio is 92%, much lower than the 245% level in global emerging markets.
Simsek also touched on the issue of the PKK terrorist group's decision to dissolve itself and said Türkiye has been combating the PKK for the last 50 years and according to a study, the cost of this struggle has reached $1.8 trillion.
"This is huge credit positive. We will no longer be spending our energy and resources on combating terror," he said.
"We will spend our energy and money on rebuilding the east and southeast of our country, where Türkiye's demographics are extremely favorable, it will become the new engine of Türkiye's growth. Also, it will help stabilize the region and help us to lift up the whole region, including Syria, Iraq," Simsek added.
In response to a question on the impact of protectionist trade policies and tariffs on Türkiye, Simsek stated that the division in global trade is a negative development for everyone and that no one will benefit from this division in the long run.
Pointing out that global trade is the driving force of economic growth, he said domestic demand and investments are the key drivers of Türkiye's growth. Exports of goods account for about 20% of GDP, while the service sector accounts for 10%.
"From our perspective, the service sector is not much affected by protectionist policies in trade and this is an advantage for Türkiye. When we look at trade in goods, 62% of our exports go to countries with which we have Free Trade Agreements. In this sense, Türkiye will be more resilient (in the face of protectionist trade policies)."
