Türkiye’s exports are approaching the $300 billion threshold by breaking records every month, President Recep Tayyip Erdoğan said Thursday as the country tries to navigate the economic crisis with a model that promotes growth via exports, employment, production and a current account surplus.
The president also said that the negative impact of inflation will begin to ease as of the beginning of the new year thanks to the measures taken by the government.
Erdoğan sent a video message to the Türkiye 2023 Summit and Money Talks organized by Turkuvaz Media Group in Istanbul.
Expressing his hope that the summit will be beneficial, Erdoğan congratulated the media group on the event that saw the participation of many respected names and thanked all the participants who enriched the program with their ideas, presentations and evaluations.
Stating that the world has been going through a painful process over the last three years that started with the pandemic and then grew more complicated with hot conflicts and regional tensions, Erdoğan said that energy, food and raw material prices, which have reached the highest levels in recent years, and the subsequent inflation problem is an issue all economies are facing.
Meanwhile, he stated that the classical approach to reducing inflation by raising interest rates has not met expectations thus far, adding that many economies that try to restrain inflation with such policies are struggling with employment losses and facing a cost-of-living crisis.
Under the country's economic program, dubbed the "Türkiye Economy Model," the Turkish government prioritizes low-interest rates to boost exports, production and investments, aiming to lower inflation and flip the country’s chronic current account deficits to a surplus.
In line with the model, Türkiye’s central bank in its last meeting in November lowered its key policy rate, or the one-week repo rate, by 150 basis points to 9.0%.
The lender said the easing cycle that started in August has come to an end as it was assessed that the current policy rate is at a sufficient level, taking into account the increasing risks to global demand.
Price increases moderated in Türkiye in November, recent official data showed, signaling that inflation pressures that have been plaguing consumers for about a year and a half might be finally easing.
The annual consumer price index (CPI) dipped to 84.39% last month, the Turkish Statistical Institute (TurkStat) announced, ending a 17-month-long cycle of rises.
It dropped from a 24-year peak of 85.51% in October and marked the first time that annual inflation has eased since May 2021, when the CPI stood at 16.6%.
Emphasizing that Türkiye is one of the countries that went through an economically troubled period relatively comfortably thanks to its robust infrastructure and economic model, Erdoğan further said, "Our industrial zones, factories and manufacturing facilities are working hard. Our roads and highways are full of trucks and trucks that carry loads from our country to Europe, Asia and the Middle East."
Türkiye’s exports remained buoyant and rose 15.4% from January through October this year to $209.5 billion, according to official data, marking an all-time 10-month high.
Türkiye has set a $250 billion export target for this year, after reaching a record $225 billion in 2021.
Erdoğan also noted that Türkiye reached a new stride by going beyond compensating for the losses in the tourism sector, which was hit the most by the pandemic, highlighting that it succeeded in exceeding the 31 million mark in employment for the first time.
Tourism revenues are vital to Türkiye’s economy in reaching its current account surplus goals.
The government raised its year-end tourism targets for the second time this year in late October. It now expects 50 million tourists and $44 billion in revenues, up from the 47 million tourists and $37 billion set in July and the 45 million arrivals and $35 billion in income it had estimated at the beginning of the year.
Energy supply security
The president further expressed that efforts are continuing to commission the 540 billion cubic meters (bcm) of natural gas discovered in the Black Sea to reduce the country’s energy dependency.
Meanwhile, Minister of Energy and Natural Resources Fatih Dönmez, also delivering an online speech to the event, stated that Türkiye has the infrastructure, technical equipment, international knowledge and experience to produce, import, trade and export natural gas.
"Our aim is to become a gas trade center where reference gas prices are determined in the region and in the world. Hopefully, we will clarify our road map on this issue toward the end of the year," he said.
Noting that they are looking forward to bringing domestic gas to the Turkish nation in 2023 and that nine out of 10 wells have drilled within the scope of the first phase of the work, Dönmez said, "85% of our Filyos Land Gas Processing Facility, which will separate the gas from the sea, has been completed."
"I hope the Sakarya gas field will be the world's fastest offshore field development project from exploration to first production," the minister said.
Dönmez also noted that the 4.6 bcm expansion phase of the Silivri Natural Gas Storage Facility has been completed and "hopefully will open next week with the participation of President Erdoğan."
Apart from the investments made in the renewables sector, Türkiye aims to reduce its dependency on foreign energy and external financing needs to further ease the pressure on the current account balance by commissioning the natural gas discovered in the Black Sea by 2023.