Minister of Treasury and Finance Mehmet Şimşek stated that he does not believe the recent disruptions will have a lasting effect. Şimşek emphasized that inflation has clearly dropped. Regarding developments in foreign trade, Şimşek said, “We will be relatively less affected because our determining factor is the domestic market.”

Minister of Treasury and Finance Mehmet Şimşek is speaking in Ankara at the IV. Agriculture Forestry Council “Agricultural Economy Workshop” program. Key points from Minister Şimşek’s remarks are as follows: A significant part of the exports, except for rule-based countries, go to these geographies, so we will be relatively less affected compared to countries similar to us in terms of foreign trade protectionism. Turkey’s dependence on exports is lower compared to similar countries. We have based our GDP growth on internal demand rather than export-oriented. The repercussions will be more limited for us compared to other countries because our determining factor is the domestic market. We have free trade agreements with a total of 54 countries outside the US and the EU, and 68% of our exports go to these countries. More than 80% of our exports go to close and friendly countries.

“WE HAVE CONTROLLED INFLATION” The ratio of gross debt to national income in Turkey is at 93%, well below the world average. Our program has a goal; sustainable high growth and fair distribution, aiming for price stability, meaning bringing inflation down to single digits and fiscal discipline. The essence of the program is a structural transformation program that will make the gains permanent. It is evident that we are facing a significant inflation problem, but we first controlled inflation. It was a period of control, and since the second half of 2024, we have entered a period of disinflation. WILL THE DOWNWARD TREND IN INFLATION CONTINUE? There is success in disinflation; we are close to achieving the program’s goals. I do not believe that the recent disruptions will have a lasting impact. There is rigidity in service inflation, we have raised the upper limit in rents by 25%, but there is no intervention in education. Inflation is clearly decreasing, and it will continue to decrease because this is our top priority. We aim to reduce the budget deficit this year, and there may be more slowing down in growth than we expected. A 3-3.5% depreciation in the lira against the dollar, with limited effects, may occur in April. But looking at the medium to long term, it is disinflationary. Food supply is one of our top priorities. This is one of the most important aspects of the program. The efficiency of the food supply chain and logistics is a crucial topic. DECLINE IN OIL PRICES We expect the current account deficit to increase. Due to the developments in the world, oil prices have plummeted, and if oil prices remain at these levels, there will be no current account deficit problem. Turkey is among the countries most positively affected by the decline in oil and natural gas prices. We have created nearly a million net new employments by the year 2024. Unemployment rates are decreasing rapidly. The unemployment rate for men is at its lowest level in history. Thanks to this program, we have reduced vulnerabilities and increased resilience against internal and external shocks. RESPONSES TO RESERVE CRITICISMS Some criticize why reserves are being used. Reserves are a buffer against shocks; of course, reserves are accumulated to be used. Currency-protected deposits were an important conditional requirement for Turkey. Reducing this would mean reducing uncertainties related to Turkey. We have reduced it to less than 22 billion dollars, and thanks to the program, the exit from the Central Bank’s reserves is being successfully ensured without causing volatility and problems in the markets.

INCREASE IN TURKEY’S RISK PREMIUM Some relate this recent increase to 1-2 weeks of volatility. No, look at the last 3-4 days, with many countries’ CDSs increasing more than ours due to protectionist measures announced by the US. We have shown a very good performance compared to countries similar to us

Our energy dependence will decrease significantly in the coming years.