Concerns over new economic program misplaced: Şimşek

RIYADH

Concerns about Türkiye’s economic program are misplaced, Treasury and Finance Minister Mehmet Şimşek has said, reiterating that the economic team has the backing of President Recep Tayyip Erdoğan.

“Türkiye is back with a new program and a new team. Political uncertainties are out of the way,” Şimşek told a panel at the Future Investment Initiative (FII) in Riyadh, Saudi Arabia.

There is a new team at the Central Bank, and they are doing what is needed to bring inflation back to single digits, he added.

“We had issues with our monetary policy framework in the past several of years. Actions speak louder than words. We are rebuilding credibility by delivery,” Şimşek said.

They frontloaded fiscal adjustment to the tune of 2.5 percent of GDP in July that should help restore fiscal health, he said.

“There is conventional monetary tightening in addition to selective credit tightening as well as quantitative tightening… So this should help anchor inflation expectations going forwards,” Şimşek explained.

They also unveiled a comprehensive structural reform agenda, which is tied to a calendar so market participants can judge their performance, he said.

“So, I think, we do have what it takes to regain the trust of people and confidence…And investors will be back.”

It takes time, but there are already signs, Şimşek said, noting that reserves increased by $26 billion and CDS is down.

“Across the board, there are good signs…The key is patience. We believe that we have the backing of President Erdoğan,” he said, adding that, therefore, the concerns about the longevity of the program and the efforts “are probably misplaced.”

Şimşek embarked on a tour of Gulf countries this week, including the United Arab Emirates, Qatar and Saudi Arabia.

On the sidelines of the FII event, Şimşek and his Saudi counterpart, Mohammed al-Jadaan, signed a memorandum of understanding, which seeks to enhance cooperation in finance and investment between the two countries.

Şimşek also discussed mutual investment opportunities with Saudi Investment Minister Khalid Al-Falih.