Speaking at the Agriculture and Forestry Council, Treasury and Finance Minister Mehmet Simsek, the global economy is faced with a serious uncertainty, he said.
“Today, the protectionism is a new normal point today,” he said.
Minister Simsek, Türkiye will be less affected by existing tariffs, he said. Minister Simsek, “Türkiye’s dependence on exports is lower than similar countries, the effects of trade war will be relatively low,” he said.
Minister Şimşek stressed that more than 80 percent of Türkiye’s exports were made to close and friendly countries.
Minister Şimşek said in his speech in the Shura;
“We will continue to provide strong support to farmers. We support 70 %of the interest rates used in agriculture as treasury, we pay.
The biggest problem we face in the world is uncertainty, not only uncertainty in trade policies, but the global economy is a serious uncertainty. The balances in the world are changing and the reflections of this confront us with uncertainty, volatility and a more complex global macro background.
Today, serious protectionism has become a new normal point. Türkiye’s dependence on export is lower than similar countries. While producing our GDP, we have gone on an export -based, domestic demand -based, so its reflections will be more limited than other countries, because it is the decisive domestic market.
In a study conducted in 2024, it is stated that if protectionism remains in the current form, there may be losses in the global economy in the global economy in the size of Germany-France. Since a significant portion of exports outside the rule -based countries are in such geographies, we will be relatively less affected by the protectionism in foreign trade compared to similar countries. I would like to express that our potential is high at the growth point of our growth rate that the ratio of Türkiye’s debt to national income is high and that this will not be an important barrier.
Türkiye’s demographic advantage will continue for 20 years.
INFLATION
Our program has a goal; Sustainable high growth and fair distribution, price stability to achieve this goal, ie we aim to reduce inflation to a single digit and financial discipline. The structural transformation program that will make the essence of the program permanent.
It is obvious that we faced a serious inflation problem, but we first took control of inflation, it was the control period, we entered the disinflation period since the second half of 2024. If we had not taken control of the budget deficit in the period when Türkiye had a great earthquake and we spend it for the wounds to hug those wounds, and if the money was financed by printing money, inflation would be what would happen to people with common sense. In the mid-2023, we were faced with a current account deficit of around 55-60 billion, inadequacy of reserves and a serious KKM problem. Aside from these two issues, there is a success in disinflation, I can say three or five to the program. I don’t think the last volatility will have a permanent impact.
A depreciation of around 3-3.5 percent in the lira may be a limited effect against the dollar, but when we look at the medium-term 1 year or beyond, it is disinfressive in the medium term. There is solidarity in service inflation, we have increased the upper limit of 25 percent in rents, there is no intervention in education, there are reflections of it from the past, but clearly inflation is falling and will continue to fall because this is our greatest priority. This year, the 19-29 percent range of midpoints 24 percent, 2025 6-18 percent range, midpoint 2 percent, 2027’de finally we have the goal of downloading to a single digit.
We reduce the budget deficit, the revenue policy is more supportive, managed directed prices below the inflation target or close. We aim to reduce the budget deficit this year, there may be more slowdown than we anticipated in growth, limiting budget performance, our main purpose was to strengthen the CBRT’s hand and to take inflation down.
Budget deficit, exchange rate protection deposit and Türkiye’s CDS
It is one of the most positively affected countries with the decline in oil prices, and the need for gross external financing is rapidly decreasing. It is one of the most positively affected countries with the decline in oil prices, and the need for gross external financing is rapidly decreasing. There is a balancing in growth, the contribution of domestic demand is 8 percent, the rapid growth brings with it a current account deficit and inflation, so one of our important goals is to make growth more sustainable balanced and to reach the foundations of high growth.
In the short term, while lowering inflation in growth, bringing the balance in growth, then to form the basis for high growth. We are at a very good point in the employment market, we have created close to 1 million net employment and unemployment rates are decreasing. The unemployment rate for men is at the lowest level of history and the unemployment rate for women is rapidly decreasing. Thanks to this program, we reduced fragility and increased the endurance of the economy against internal and external shocks. They criticize, why the reserves are used, reserves are a buffer against shocks, Türkiye’s reserve position is 1 according to the definition of IMF, 1 is provided reserve competence.
KKM was an important conditional obligation for Türkiye, reducing it means reducing the uncertainties of Türkiye, we have reduced the uncertainties of Turkey, we have reduced it to below 22 billion dollars, and the exit from the KKM is achieved successfully through the program without creating volatility and problems in the markets. CDS’s last increase is completely 1-2 weeks of volatility, see the last 3-4 days of the US protectionism measures announced by the CDS of many countries has increased more than us. The relative movement in the CDS means that we have achieved a very good performance compared to similar countries. In the industry, going up with the added value chain, going to higher technology is a critical field for us, improvement of the investment environment, there is improvement in the areas of the deepening of the capital markets.
What’s we missing? We do not produce products in high technology at the desired level. 30 products in high technology in 8 main areas, 30 billion dollars will be provided by 2030, so far more than $ 7 billion investment applications have been made, the process continues. We support high -tech products with credit, we will permanently improve both Türkiye’s production composition and foreign trade balance. “
