Türkiye’s economy remains resilient, says Mehmet Şimşek

SAKARYA

Treasury and Finance Minister Mehmet Şimşek emphasized Türkiye’s resilience in the face of ongoing war-related shocks, noting that while the effects of the conflict will take time to fade, the country has already proven its strength.

Speaking at the International Economic Summit in Sakarya, Şimşek said: “We believe Türkiye is resilient. We proved it last year, and we will prove it again this year.”

He highlighted that Türkiye’s limited dependence on the Strait of Hormuz provides an advantage. He explained that as many countries face potential energy supply problems if the war drags on, Türkiye remains less vulnerable due to its minimal reliance on the region.

Şimşek pointed out that Türkiye’s natural gas imports from Iran are delivered via pipelines, meaning the country has been largely unaffected. He underlined that the durability of the Turkish economy stems from a solid fiscal policy framework, with a relatively low budget deficit-to-GDP ratio providing room for maneuver.

He noted that while the current account deficit may rise slightly, it remains at a manageable level compared to past years.

Şimşek acknowledged a temporary increase in Türkiye’s risk premium during the conflict, but said it began to decline again once a ceasefire was announced. He added that although foreign capital briefly exited during the war, it has started to return with the ceasefire and reserves have been replenished as foreign inflows resumed.

The minister described exchange rate volatility as modest and stressed that confidence in the country’s economic program has kept foreign currency demand limited.

He also pointed to the large amount of gold held outside the financial system, estimating “under-the-mattress” reserves at around $640 billion and suggested that bringing this gold into the system would make navigating such crises easier.