Structural transformation key to sustaining gains: Şimşek

DOHA

Treasury and Finance Minister Mehmet Şimşek has said Türkiye’s recent economic achievements must now be cemented through structural transformation, expressing optimism that reforms will make these gains permanent.

Speaking at a panel during the Doha Forum 2025, Şimşek highlighted the resilience of Türkiye’s $1.6 trillion economy, noting that over the past two and a half years, the budget deficit has narrowed to 3 percent of GDP and public debt has fallen to 24 percent of GDP.

“The current account deficit has largely disappeared. In the same period, our gross reserves increased by $120 billion, while foreign-exchange-protected deposits declined by $140 billion,” he said.

Şimşek acknowledged that growth has slowed compared to Türkiye’s long-term average of 5.5 percent, currently standing at 3–4 percent, but described it as “modest yet manageable.”

He added that unemployment remains in single digits, while inflation has dropped from the mid-70s to 31 percent and is expected to fall into single digits.

“We have addressed many concerns. The real challenge now is to make these gains permanent through structural transformation. Our President [Recep Tayyip Erdoğan] has declared 2026 the year of structural reforms, and I am very optimistic [about it],” he said.

Turning to global trade dynamics, Şimşek emphasized that 80–85 percent of Türkiye’s trade operates within a rules-based framework, with 62 percent of exports directed to countries with free trade agreements.

He underlined Türkiye’s position among the world’s top 20 service exporters and its ambition to become a regional hub for digital services.

“We prefer rules-based trade, which is why we aim to conclude a free trade agreement with Gulf Cooperation Council countries. If global trade is fragmenting, our antidote is regional integration. We are working to persuade our partners to invest in a new development corridor linking the Gulf to high-speed rail and highways, connecting the region to Beijing and London. Connectivity, regional integration, industrial policy and service exports will advance together,” Şimşek said.

On U.S. tariffs and trade tensions, particularly between Washington and Beijing, Şimşek warned of indirect risks.

“We are more concerned about the indirect effects of tariffs and non-tariff barriers. No country is fully immune. For economies like Türkiye, the indirect impacts are more pronounced, as we are the world’s 14th largest manufacturing base,” he said.

Labor-intensive industries are shifting geographically, and we are focused on supporting those affected by this transformation. That is why logistics investments, smart fiscal policies and rapid responses to disruptions are critical,” he concluded.