Earlier this month, Turkish President Recep Tayyip Erdogan and economy czar Mehmet Simsek promised to continue their efforts to address high inflation in Turkey, despite the potential backlash from the public against the government’s economic policies. This issue was a major factor behind the ruling party’s disappointing performance in last month’s local elections, where they were defeated by the main opposition party. Simsek was appointed treasury and finance minister after Erdogan’s reelection in May 2023, with the task of resolving the economic challenges caused by Erdogan’s low-rate policy, particularly the soaring inflation.
With the next presidential and parliamentary elections in Turkey four years away, Erdogan has made addressing inflation a top priority. He emphasized the importance of avoiding populist policies that could harm the country, its people, and future generations. Erdogan and Simsek stressed their commitment to implementing measures to control inflation and bring it down to single digits in a sustainable manner. This message was particularly important for foreign market actors who were watching closely.
Simsek outlined the government’s strategy to achieve their goal, which includes controlling public sector spending, prioritizing saving, implementing tight monetary policies, and adopting selective credit and income policies. Both Erdogan and Simsek are determined to see positive results from their economic program, especially with regards to inflation, in the second half of the year. Their focus on addressing inflation is seen as essential for rebuilding confidence in Turkey’s economy and ensuring its stability moving forward.