Minister of Treasury and Finance Mehmet Şimşek, held within the scope of TRT World Forum 2023 held in Istanbul with the theme “Developing Together: Responsibilities, Actions and Solutions” “Reshaping the Global Economy” He spoke at the opening of the session titled.
Explaining that the slowing down of globalization, increasing protectionism, aging world population, high debt and the problems brought by climate change indicate the beginning of a new era, Şimşek said that these problems will have a negative impact on global growth and global trade volume in the next 5 years.
Şimşek stated that trade is the engine of growth, but there are restrictions on global trade in many regions of the world.
Minister Şimşek mentioned the negative impact of increasing aging in the world on global growth and stated that Turkey has a significant advantage in this field and that this situation has a positive impact on the service sector and tourism.
Emphasizing that Turkey has important advantages and opportunities in terms of problems that negatively affect the global economy, Şimşek continued his words as follows:
“Thanks to our geopolitical location, we are one of the best candidates for supply from friendly and close countries. Compared to developing countries, we show a strong growth performance. Moreover, while showing this performance, we have managed to keep our debt level low compared to other countries. In a period when the world population is rapidly aging, we are relatively young and “Our dynamic population structure distinguishes us positively from other countries.”
“WE WILL TAKE THE NECESSARY STEPS IN THE FIGHT AGAINST CLIMATE CHANGE”
Minister Şimşek mentioned the negative impact of global climate change on international trade and international investments and said that they will take the necessary steps to combat climate change, which is one of the most important issues of the next period.
Pointing to the conflicts taking place in different geographies of the world as well as climate change, Şimşek said, “Even the most basic rules are not respected anymore. Look at what happened in Gaza. Some countries cannot even call for a ceasefire. They do not even have the courage to do so. The world we are in now is such a world.” “There is still a hegemonic power and many other players are talking about how the new system will be shaped, which brings a lot of uncertainty for global growth.” he commented.
“TURKEY STILL OFFERS A SERIOUS GROWTH POTENTIAL”
Minister of Treasury and Finance Şimşek talked about the advantages that Turkey’s geographical location offers to the country and said that Turkey, as a large producer, can improve this feature with nearby countries.
Pointing to Turkey’s growth performance in the last 10 years, Şimşek emphasized that they have done many things better than developing countries other than India and China.
Şimşek noted that the population of Turkey, which is an accessible market, is higher than the total of the 18 EU countries, and said, “If we put our own house in order here, no country can ignore Turkey as it is such an important power. Turkey still offers a serious growth potential. We have opportunities.” But we need to do more to gain an advantage.” he said.
“IT HAS STARTED TO BE SEEN IN MACRO INDICATORS TOO”
Minister Şimşek, talking about the economic program implemented by Turkey, said, “We expect the 2023 budget deficit to be below 6 percent compared to national income.”
Emphasizing that they started to implement an inclusive program in order to make the most of the opportunities they have, Şimşek said:
“Sustainable high growth and permanent welfare increase are only possible with price stability. For this reason, our main priority is the fight against inflation. Our program is working successfully. The positive reflections of the program have begun to be seen in macro indicators after financial indicators. As we move towards balancing in growth, the current account deficit is decreasing “There is a loss of momentum in inflation and our reserves are increasing. Annualized core indicators, which provide accurate information about the trend in inflation, are in line with our targets. The fight against inflation is a process, the decline in annual inflation will start from mid-2024.”
“FOREIGN INVESTOR INTEREST TOWARDS OUR COUNTRY HAS INCREASED RECENTLY”
Minister Şimşek stated that earthquake expenditures caused a temporary deterioration in the budget balance and that they have implemented revenue and expenditure policies that will restore fiscal discipline.
Stating that the practices in monetary and fiscal policy will be supported by comprehensive structural reforms in the coming period, Şimşek made the following statements:
“Recently, foreign investor interest in our country has increased. There was an inflow of 4.9 billion dollars in portfolio investments in the June-September period, while there was an outflow of 2.9 billion dollars in the January-May period. Current data shows that the inflow continues. Foreign investors of the banking sector and non-bank sectors “Debt rollover ratios are increasing. Our reserves continue to increase with the decreasing current account deficit and increasing capital inflow. Gross reserves increased by 42 billion dollars compared to May.”
Şimşek noted that the current account deficit continues to narrow and this narrowing will continue, adding that monetary policy has become more functional, the 5-year credit risk premium (CDS) continues its downward trend, the increase in ratings will continue, and that these developments show that they are on the right track.