Economic program withstood shocks, passed the test: Şimşek
ISTANBUL
The economic program overcame two major shocks — one domestic turbulence in March and then an external shock in early April — and has proven its credibility, Finance Minister Mehmet Şimşek has said.
The program has been tested, and there is very clear success, Şimşek told private broadcaster NTV in an interview on June 12.
“A program that has managed to withstand two major shocks back-to-back has strengthened Türkiye’s economic structure and increased its resilience,” the minister said.
Şimşek emphasized that the turbulence that began in mid-March and continued into April due to external factors was well managed, stating that this process was handled with a market-friendly perspective.
Highlighting that significant capital outflows happened during this period, but a large portion of those outflows have returned, Şimşek said: “This shows that confidence in the program remains.”
“Gross reserves fell from just over $170 billion dollars to below $140 billion. They have climbed back up to around $154–155 billion. Reserves have largely recovered,” he explained.
Şimşek noted the decline in CDS spreads and in the yield of the two-year Treasury benchmark bond, “Interest rates and the country risk premium are falling, reserves are increasing and the exit from FX-protected deposits (KKM) continues. It’s clear that the program has proven itself. It is on track,” the minister said.
The downward trend in inflation will continue, as financial conditions will remain tight, he also said.
“We are in a period of a lasting decline in inflation,” Şimşek added.
In May, the annual inflation rate slowed to 35.4 percent with consumer prices rising 1.5 percent monthly.
“Inflation will continue to decline, and it will be around the 20s at the end of this year,” he said.
