The global shock due to the Middle East conflict will affect Türkiye's economic program but will not cause any change in its priorities, Treasury and Finance Minister Mehmet Şimşek said on Thursday.
Şimşek acknowledged that the Iran war is likely to cause deviations in the inflation, growth and external balance targets this year due to higher energy prices.
The conflict, unleashed on Feb. 28 by Israel and the United States against Iran, provoked reprisals from Tehran across the region and a shipping blockade in Hormuz, a crucial global trade route, leading to a significant global surge in the price of hydrocarbons.
The fallout poses a challenge for import-heavy economies like Türkiye, where inflation rose to nearly 32.4% in April, the highest measure since October 2025.
Şimşek still signaled the government would maintain its disinflation and fiscal discipline agenda.
"We are facing a major global shock, but we have never envisaged any change in the program's priorities," he told a summit in Istanbul.
He was referring to the government's medium-term road map that has been implemented since 2023 and has mainly centered around a tight monetary policy to curb inflation.
Şimşek acknowledged that inflation, current account deficit, budget deficit and growth outcomes were likely to diverge from official targets this year, largely due to the impact of the Iran war-linked rising energy prices.
"This is highly likely, but we are doing and will continue to do what is necessary to keep the program broadly on track," he said.
The shocks are significant but manageable, Şimşek said, arguing that Türkiye had built resilience through fiscal discipline and macroeconomic buffers.
He still said Türkiye could not remain insulated from global developments. "We do not live on another planet. We are part of the global economy," he noted.
Şimşek added that Türkiye was not facing an energy supply shock thanks to its diversification of oil and natural gas suppliers and products, adding that the country was not dependent on the Strait of Hormuz.
"Our dependence on the Strait of Hormuz in energy is now almost non-existent," he said.
He said the government had used fiscal space to cushion households and businesses from higher fuel prices.
Without intervention, gasoline prices would have risen from TL 59 ($1.30) to TL 79 per liter, he said, but were currently around TL 64-TL 65.
"Many countries saw fuel price increases of 20%-30%, and in some cases above 30%. Türkiye managed this period with an increase of around 11%," he said.
Şimşek said Türkiye entered the current crisis with stronger macroeconomic balances, noting the current account deficit was below 2% of GDP before the shock, while foreign exchange reserves had risen from around $100 billion before the program to roughly $166 billion.
Türkiye's long-term external debt-to-GDP ratio has also improved to around 33% from a historical average of 44%, he added.
Şimşek said the government aimed to turn the crisis into an opportunity, including efforts to position Türkiye as a global trade hub and attract multinational firms' regional headquarters to the Istanbul Financial Center.
"We cannot waste this crisis; we will absolutely, without a doubt, turn it into an opportunity for our country."
