Minister of Treasury and Finance Mehmet Şimşek made significant statements regarding the economic agenda during a live broadcast on NTV.

WAS THE GULF TOUR SATISFACTORY?

Minister Şimşek summarized his messages regarding the economy as follows:

“I visited Qatar and Kuwait. I am the co-chairman of the Joint Economic Commission for both countries. A summit will be held with Qatar in the near future. The Gulf region holds serious opportunities for us, especially in tourism.

We are a country that has successfully achieved sectoral diversity. Sourcing from nearby countries has become a crucial concept for us. The model we’ve adopted in the economy is based on the principle of complementarity. I believe there is significant potential as investors’ concerns are alleviated. We met with the leading executives of nearly 250 firms.

INVESTOR MEETINGS ABROAD

Next week, we will meet with important banks in the United States. Investment banks are holding meetings on the sidelines of the IMF meetings. Our attendance at the G20 will involve lengthy discussions. We will also have discussions with the U.S. Treasury Secretary and meet with multilateral international banks.

WILL THE CURRENT ACCOUNT DEFICIT CONTINUE TO DECLINE?

The current account deficit is Turkey’s Achilles’ heel. The deficit was significantly high last May. It has nearly dipped below 1%. If it weren’t for regional conflicts, the deficit would be stable. Our main projections regarding the current account deficit are undergoing structural transformation.

We have taken very important steps. We have identified 284 products and aim to attract investments from the world and Turkey for these products through financing. Under 8 main headings, 30 products are set to receive $30 billion in support by 2030. Currently, green transformation is the priority. Support will be provided for high-tech product manufacturing. These measures will permanently reduce the current account deficit. We are at a significant threshold regarding the deficit. With the implementation of these projects, we will start discussing a current account surplus.”

“INFLATION WILL CONTINUE TO FALL”

The annual inflation for basic goods has dropped to 28%. Inflation will continue to decrease. Service inflation has started to decline; however, there is rigidity globally. After lifting the 25% cap on rent increases, renewed rental agreements have seen an increase of nearly 120%.

Service inflation will react strongly to income policies over time. As inflation begins to decline, we will break the rigidity in the future. Despite constraints on fiscal policy due to the earthquake and EYT (early retirement), a decrease in inflation has already begun. A fall in inflation means a slowdown in price increases. We will implement this program; it is yielding results. There is an improvement in inflation expectations.

The effect of renewed rental agreements has been felt, based on past inflation. These will exit the equations and the basis after one year. The impact of rent increases on inflation will normalize after a year. An increase in housing supply will influence rent inflation.

Green transformation is the top priority. There is incredible interest in green transformation in the Gulf region. The appetite is very large. Recently, an investment advisory meeting was held under the leadership of our President, where there was immense interest in green transformation from the attendees.

“THE BUDGET DEFICIT WILL DECREASE”

Time is needed; we will implement the policy with patience. There was a significant earthquake in this country last year. The budget deficit was 5.2% last year. Two-thirds of the deficit resulted from earthquake-related expenditures. We prioritized addressing the damages caused by the earthquake.

The effect of EYT on national income is 2%.

Let’s not look to the past but focus on the future. We are implementing a restrictive fiscal policy.

“PUBLIC VEHICLE SALES WILL BEGIN”

We have reduced rental vehicles by 15%. The Privatization Authority will soon start selling vehicles. Deviations in public spending will remain below 1%. This was not the case previously. No ministry will exceed the allocated budget.

About a thousand vehicles had been transferred to privatization. We do not allow anything except necessary vehicle rentals.

“SIGNIFICANT SOURCE INFLOW IS EXPECTED”

Our economic program is yielding positive outcomes. The net reserve increase has exceeded $100 billion. In Turkey, we have resolved the issue of reserve adequacy.

ADDITIONAL RESOURCE PACKAGE FOR THE DEFENSE INDUSTRY

We are in a difficult geographical region and must enhance our deterrent capability. We need to secure additional resources for defense industry projects.

WHY WILL THERE BE A DEDUCTION FROM CARDS?

Funding is necessary for the construction of the iron dome and for the 5th generation fighter jets. Resources are essential for defense projects. We are significantly investing in the Defense Industry Fund. This year, we have increased it to 165 billion. We have received many proposals, and we have worked with our economic advisors. We respect the discussions, and our party group may reconsider some topics.

“THIS FUND IS OUTSIDE THE BUDGET”

This package has been prepared entirely to provide resources for defense. It will solely go to the Defense Industry Fund. It is not designed to reduce the budget deficit. Our citizens should have no worries about this matter. Not a single cent of this package will enter the budget. Defense is very important for us, and there is no intervention by the Treasury in this fund.

We cannot ignore criticisms. The assessments received will be considered by the Parliament. I personally do not find off-budget funds principled, but some funds are necessary.

“THERE IS A SLOWDOWN IN THE ECONOMY”

The degree of slowdown is not as significant as claimed.

“NO COMPROMISE ON EMPLOYMENT”

If necessary, we will take additional measures aimed at employment. Our top priority is sustainable high growth. The prerequisite for this is price stability. We will not relax without lowering inflation.


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