Türkiye's commitment to price stability remains "very strong," Treasury and Finance Minister Mehmet Şimşek said, pledging that Ankara would maintain its economic program and deliver disinflation despite difficult global and geopolitical conditions.

Speaking to international media, Şimşek evaluated economic goals and the current picture days after the government unveiled a new road map for the 2027-2029 period.

"The only criticism we would accept is that we have been ambitious in our targets. We have, and there is, of course, a cost associated with that. But the commitment is there," he said.

According to the 2027-2029 Medium-Term Program (MTP), the authorities have lifted their expectations for year-end inflation, mainly due to war-related effects, projecting it to decline to 9% by the end of the program.

Inflation is forecasted to come in at 28.4% this year, 21% in 2027 and 13.5% in 2028, before falling to single digits.

Annual inflation rate eased to 31.51% in August from 31.75% in July, according to official data.

Şimşek joined Vice President Cevdet Yılmaz and the head of the Presidency's Strategy and Budget Office, Ibrahim Şenel, at the Presidential Complex for an international media meeting on MTP.

"We will stay the course and deliver. What is important is the direction of travel," he said, according to remarks published late Wednesday.

Combating illicit finance

At the same time, the minister noted that Türkiye maintains close cooperation and effective information-sharing with its partners and allies, particularly the U.S.

"Türkiye is committed to combating terrorist financing, any form of illicit financial activity, money laundering, sanctions evasion and all forms of illicit trade," he said.

All companies operating in Türkiye must fully comply with national regulations and avoid sanctions, while competent authorities are assessing recent U.S. Treasury announcements and allegations within the rule of law, he added.

"Our message to both the financial sector and other actors in the economy is that all companies have to conduct their activities in full compliance with national regulations," Şimşek said in apparent reference to Iran-related sanctions.

The U.S. Treasury Department has recently moved with a campaign to increase economic pressure on Iran.

Well-established framework for Iran gas payments

Şimşek also said Türkiye's gas contracts with neighbors such as Iran and Russia are long-term agreements, some of which have been in place for decades.

"We do not pay Iran directly for the natural gas. We have an understanding, again, with the U.S. The money sits in a very tightly regulated account, and payments can only be made for items such as food and medicine," he said.

"There is a well-established framework governing how natural gas payments are managed."

Iran accounts for a relatively small share of Türkiye’s gas imports, while the country has invested heavily in alternative supplies and storage, Şimşek said, noting that the U.S. is now one of Türkiye's leading liquefied natural gas (LNG) suppliers.

Return to free float 'desirable'

Moreover, Şimşek said that returning to a free-floating exchange rate is desirable because it acts as a shock absorber, but lower inflation, better-anchored inflation expectations and two-way foreign-exchange flows are needed first.

"This is not about being afraid of returning to a free float. It is about getting the conditions right," he said, calling speculation over an imminent change "baseless.”

He stressed that daily exchange-rate policy is conducted by the central bank and that the Medium-Term Program assumes a neutral real exchange rate.

"We are not in the business of making bets on the exchange rate," he added.

Price stability

Şimşek also rejected claims that the 2027 inflation target was revised upward to permit looser monetary policy.

"The idea that the inflation target for 2027 was revised upward to loosen monetary policy never came onto our agenda," he said.

He said the program reflects significant changes in energy, agricultural and other commodity prices, as well as the difficult geopolitical environment.

"When the facts change, of course, forecasts change," he said.

Housing and selective credit support

Şimşek also said Türkiye has invested $104 billion in earthquake reconstruction, with 621,000 housing units delivered or due to be delivered this year.

Rent inflation in earthquake-hit provinces is around 20%, compared with 50%-60% elsewhere, demonstrating that "supply-side measures make a huge difference," he said.

The government also plans 750,000 state-funded social housing units to ease housing and rental costs.

Şimşek said selective credit programs support manufacturers, farmers, small businesses and technology investments, helping preserve employment and create jobs.

"The ultimate goal of this program is a sustainable high growth rate and better income distribution. So, basically, better standards of living for Turkish people," he said.