'Reducing inflation is our top priority,' says Şimşek
ISTANBUL

Turkish Treasury and Finance Minister Mehmet Şimşek acknowledged market skepticism while emphasizing the government's commitment to tackling inflation.
"Our first priority is to reduce inflation," Şimşek stated. "Inflation will fall, but I understand the doubts in the market."
Speaking at a Bloomberg event yesterday, he noted that economic growth is currently below historical trends, which he deemed "probably necessary to move to a sustainable high growth trajectory."
Şimşek expressed full confidence in the Central Bank team, advocating for maintaining a tight stance on consumer loans. He declined to discuss the valuation of the Turkish Lira, reiterating that Türkiye does not have an exchange rate target.
"As long as the current economic program is implemented, you can trust that the real valuation in the Turkish lira will continue," Şimşek assured.
Also addressing international trade, Şimşek downplayed the likelihood of Türkiye being targeted by additional U.S. tariffs, citing the country's already high tariff standard.
Fitch monitoring inflation decline
In a related development, Fitch Ratings Senior Director Erich Arispe Morales provided insights on Türkiye's credit rating outlook.
Morales highlighted the ongoing disinflation process and improvements in international reserves as key factors in their assessment.
"The decline in inflation continues and we expect it to fall further. For Türkiye, we estimate that inflation will be 23 percent at the end of this year and 18 percent at the end of 2026," Morales projected.
Fitch Ratings recently affirmed Türkiye's credit rating at "BB-" with a "stable" outlook. Morales noted that the reduction in Türkiye's current account deficit and strengthening of international reserves align with their expectations.
Morales also stated that they expect portfolio investments to increase if Türkiye maintains its current policies.
However, Morales noted that foreign direct investment (FDI) processes are more complex.
"While the macro environment plays a significant role, broader factors such as institutional concerns also influence investment decisions. FDI requires a long-term commitment, and it may take time for investors to gain confidence," he explained.
Regarding Türkiye's potential return to "investment grade" rating, Morales emphasized that reducing inflation will be crucial in this process.
He cautioned that reaching investment grade could take time, stating, "While reducing inflation, Türkiye needs to ensure investor confidence in the predictability of its policies. Consistently maintaining macroeconomic stability is ultimately the key factor in achieving investment grade. Strong policies and institutional strength are critical to reaching this goal."