Türkiye to stay course on disinflation program: Finance minister

ISTANBUL

Turkish Treasury and Finance Minister Mehmet Şimşek (AA Photo)

Türkiye will maintain its economic program and deliver disinflation despite difficult global and geopolitical conditions, Treasury and Finance Minister Mehmet Şimşek has said.

Şimşek joined Vice President Cevdet Yilmaz and Presidency of Strategy and Budget head İbrahim Şenel at the Presidential Complex on Sept. 9 for an international media meeting on Türkiye’s 2027-2029 Medium-Term Program (OVP).

“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. “We will stay the course and deliver. What is important is the direction of travel.”

Şimşek said 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.”

Şimşek 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 in order to loosen monetary policy never came onto our agenda,” he said.

Şimşek said Türkiye’s disinflation program began in earnest in mid-2024, noting that international experience showed inflation typically takes 3.4 years to return to pre-shock levels.

“If you take that as a reference — 2025, 2026, and then essentially the end of 2027 — I think we’ll be back to pre-shock levels,” he said.