Treasury and Finance Minister Mehmet Şimşek on Tuesday asserted that Türkiye is not facing growth constraints while combating inflation, while also highlighting the nation's resilience to global trade disruptions.
"The worst is behind us; inflation is on a downward trend and will continue to decrease with our tight fiscal and monetary policies," Şimşek told a panel on the sidelines of the Future Investment Initiative (FII) summit in Riyadh.
He flew to the Saudi capital on Tuesday to join the three-day high-profile annual investor forum, which comes as conflicts shake the Middle East and Europe.
As part of a broader policy shift mainly to tackle inflation, Turkish authorities have pursued tight monetary and fiscal policy since June 2023. The government has adopted tax and savings measures meant to rebalance the economy and leave behind a steep currency depreciation and price rises.
The central bank has since raised its key policy rate by 4,150 basis points and has left it unchanged for the last seven months.
Tight policy, fiscal measures and base effects brought annual inflation down to 49.38% in September from a peak of 75.45% in May. The central bank expects disinflation to gain pace and forecasts an end-year rate of 38%. The bank sees it easing to 14% next year, projecting it to decline further to 9% by the end of 2026.
Şimşek said Türkiye has managed to overcome many macroeconomic challenges.
"The central bank’s reserves rose $100 billion in a year and a half," the minister noted.
Şimşek also stressed Türkiye's commitment to a broad reform agenda, including green and digital transformation. With the country’s large economy and diverse production, he said the programs implemented are on track to reach their goals.
The minister cited Türkiye's favorable debt-to-gross domestic product ratio of 26% – notably lower than many global peers. He said this offers an advantage for continued growth.
Şimşek underscored that Türkiye's average growth rate has exceeded 5% over the past 20 years.
The economy grew by 2.5% in the second quarter. The third-quarter GDP data is due on Nov. 29.
The drive to cool prices is expected to lower Türkiye's growth to 3.5% this year, according to the government's prediction. Its three-year policy road map sees growth at 4% next year.
The economy grew 4.5% in 2023.
Şimşek said that the resilience of the Turkish economy withstands the fragmentation in global trade.
"Türkiye's diversified economy and trade deals with 54 countries position us well against global supply chain disruptions," he noted.
"With agreements covering 60% of our trade, Türkiye stands resilient, ready to navigate nearshoring trends and strengthen economic partnerships."
On the sidelines of the FII summit, Şimek said he held comprehensive meetings with numerous companies and investor groups.
In a post on social media X, he said he "shared the progress made in our (medium-term economic) program, our upcoming policies, and assessments regarding regional risks. I also had productive bilateral discussions with my counterparts."
"The trust in our program and interest in our country continues to increase. Our strong potential and policies will position Türkiye as a key regional hub for international investments."
