Investments from Gulf countries may begin this year: Şimşek

ISTANBUL

Investments from the Gulf countries as part of the agreements signed last month may begin this year, Treasury and Finance Minister Mehmet Şimşek has said.

“We have a productive dialogue with the Gulf countries. The most concrete indicator of this is the $51 billion investment package deal announced [in July]. We expect some of those investments will begin this year,” Şimşek said in an interview with daily Yeni Şafak.

Several agreements were signed during President Recep Tayyip Erdoğan’s Gulf tour in July, which covered Saudi Arabia, the UAE and Qatar. The primary focus of Erdoğan’s Gulf tour was to attract investments.

“Dialogue with the Gulf nations will continue,” Şimşek said.

The minister also noted strong interest from international investors in the event organized by JP Morgan in Istanbul earlier this month.

“There should not be any problems regarding the inflow of funds if we implement rule-based policies, which comply with global norms. Certainly, there was a potential in our talks [with investors].”

After years, Türkiye now has a disinflation program, a program which aims to bring the current account deficit under control, that is the reason for foreign investors’ interest in the country, the minister added.

“Some of the investors are in the wait-and-see mode. They think we are taking steps in the right direction,” he said.

Inflation outlook

The government aims to lower inflation down permanently after a transition period, according to the minister.

As the Central Bank predicted, inflation will continue to rise in the next months due to temporary factors, Şimşek said.

He noted that the recent tax hikes, which may push up inflation, were introduced to generate funds to meet the financing needs arising from the earthquake-related costs and those were one-off measures.

The Central Bank last month raised its end-2023 inflation forecast from 22.3 percent to 58 percent.

After eight months of deceleration, the annual inflation rate climbed from 38.2 percent in June to 47.83 percent in July.

The month-on-month increase in consumer prices accelerated from 3.92 percent to 9.49 percent.

The minister also voiced optimism that Türkiye’s economic outlook will improve starting from the second half of 2024. “Tailwinds will replace the current headwinds for the Turkish economy,” Şimşek said.