Finance Minister Şimşek says inflation to keep easing.

ISTANBUL

Treasury and Finance Minister Mehmet Şimşek said the ongoing war in the Middle East has had economic repercussions but stressed there was no reason for pessimism, adding that the downward trend in inflation would continue.

Speaking in a televised interview with CNN Türk on June 8, Şimşek said Türkiye was prepared for external shocks and capable of managing the impact of the conflict.

“War is a major shock, but we can manage it. We managed it before, and we see it as manageable now as well. We were prepared. We had prepared Türkiye against shocks,” he said.

Şimşek acknowledged that the conflict was creating inflationary pressures on the economy.

“Had this external shock not occurred, the probability of inflation ending this year slightly below or slightly above 20 percent was quite high,” he said.

“When we take into account the direct and secondary effects of the war, as well as the oil price levels markets are pricing in for the entire year, there is at least an additional 5 percentage points of inflationary pressure,” he added.

He also noted that the Central Bank expects year-end inflation at 26 percent, while market expectations remain somewhat higher.

“What matters for us is the continuation of the downward trend in inflation. Has the required monetary policy stance deteriorated? No. Has the fiscal policy stance weakened? No,” Şimşek said.

He stressed that the government was continuing to implement supply-side measures, including social housing projects and steps aimed at increasing food supply.