Türkiye is “open for business and dialogue,” Treasury and Finance Minister Mehmet Şimşek said on Wednesday in Berlin, highlighting the diversification of supply chains after the pandemic has benefited Türkiye, and the country now has a comprehensive reform program that will help boost competitiveness, productivity and potential growth.
“We are open for business, and we are open to dialogue,” Şimşek said at the Berlin Global Dialogue (BGD) 2024, where this year’s theme was “building common ground.”
The minister noted that Türkiye is located in a challenging region, with the Russia-Ukraine war significantly impacting inflation dynamics. While the country has overcome several macroeconomic challenges, other issues, such as inflation, “require more time to address.”
Türkiye was facing a large current account deficit, the minister explained, though this figure has decreased. The budget deficit, excluding earthquake expenditures, has also fallen to 1.6% of gross domestic product (GDP) after being brought under control.
Şimşek highlighted that inflation in Türkiye is expected to “fall to single digits” by the end of 2026, following the global experiences of other countries combating inflation. He credited the economic administration’s tight monetary policy and fiscal discipline with anchoring these expectations.
Citing a study by the International Monetary Fund (IMF), which found that trade fragmentation in the global economy could reduce GDP by up to 7%, the minister said the impact would be “equivalent” to the GDPs of Germany and France.
Şimşek emphasized Türkiye’s resilience to trade fragmentation, pointing to the country’s full customs union with the EU.
“The customs union we have with the EU ensures we trade with them based on rules. So, in a sense, we are friends. As far as friendshoring with the EU is concerned, the customs union makes the EU our friend. With our neighbors, whether in Central Asia, the Balkans, North Africa or the Middle East, we consider them friends,” he said.
“That is key. Regarding nearshoring, we’ve benefited post-pandemic from the diversification of supply chains. Geographically, Türkiye looks like the center of the Earth: we are close to Europe and a fast-developing immediate neighborhood. And, of course, we have highly competitive demographics and a skilled workforce,” he added.
He also noted that Türkiye has attracted $270 billion in foreign direct investments (FDI) over the past two decades, highlighting the long-term benefits of friendshoring.
Şimşek stressed that Türkiye does not “suffer” from high debt levels. He explained that the global debt, including private sector, household, corporate and government debt, stands at “about 330% of GDP.” In contrast, “for emerging markets, it’s roughly 250%, and in Türkiye, it’s about 99%.”
He also pointed out that Türkiye is a “sizable economy” with a national income of “$1.3 trillion” and that the real GDP growth rate has averaged “about 5.5%” over the last two decades. He emphasized the ministry’s ongoing efforts to make Türkiye more resilient to economic shocks.
“We have a comprehensive reform program that will help boost competitiveness, productivity and potential growth. We are open for business, we are open to dialogue, and of course, we would like to re-engage not only with our region but also with our European friends,” the minister added.
