Treasury and Finance Minister Mehmet Simsek suggested financial investors to extend their purchases of Türkiye’s long-term bonds, emphasizing the country’s growing geopolitical and geostrategic significance. He emphasized that as long as the current Economic Stabilization Program is intact, Central Bank will maintain the strong TL policy, which aims to mildly increase the inflation-adjusted value of the currency vs USD, which reduces TL cost of imported goods, thus aids disinflation.
“If we exclude last year and this year, Türkiye’s real gross domestic product (GDP) growth rate has averaged around 5.5% over the past 25 years—a strong performance compared to similar economies. We are an open economy seeking free trade agreements (FTAs). All these factors indicate that Türkiye can be a favorable investment destination,” Simsek said.
Speaking at Bloomberg’s “Future of Finance” event in Istanbul on Tuesday, Simsek responded to questions from Bloomberg TV host Joumanna Bercetche.
Discussing the outcomes of the disinflation program implemented over the past 18 months, Simsek said that Türkiye has been taking steps to achieve single-digit inflation and ensure sustainable high growth. He recalled that in the first decade of the 2000s, Türkiye successfully reduced inflation while doubling its growth rate. “We want to repeat that success, but this journey requires us to rebalance growth,” he said.
“However, this growth was entirely driven by exceptionally strong domestic demand, which led to a significant current account deficit and inflationary pressures. What we have done is balance growth. As a result, our growth rate, temporarily, is slightly lower than historical standards,” Simsek stressed, recalling that economic growth was around 5% when the disinflation program began in mid-2023.
‘Better prospects for Türkiye’
Simsek described the disinflation program as part of a comprehensive transformation plan, stating, “There are better prospects ahead for both Türkiye and the Turkish lira.”
Highlighting the long-term benefits of disinflation policies, he emphasized that they contribute to sustainable and robust economic growth. He noted that these measures lead to lower yields and risk premiums, making Türkiye an attractive destination for investors.
While acknowledging past challenges, he underscored the importance of looking ahead rather than dwelling on previous difficulties. He affirmed that the ongoing program is functioning effectively, progressing as planned, and yielding positive results.
“Türkiye is a large market. As of last year, the country’s GDP reached $1.3 trillion. We have a population of 85 million, or nearly 90 million when including Syrian refugees. Additionally, we have strong infrastructure. Anyone investing in this country can rely on solid infrastructure. Our human capital is also one of our greatest strengths,” Simsek noted.
Committment to strong TL
“You could bank on real exchange-rate appreciation lasting as long as the program delivers,” Mehmet Simsek said at a Bloomberg event in Istanbul on Tuesday, referring to Turkey’s pivot to more orthodox monetary and fiscal policies since mid-2023. “Right now, the delivery is there. I can tell you that there are more opportunities going forward”,
wrote Bloomberg.
The lira weakened around 15% in nominal terms over the past year to around 36 per dollar. But that’s far below the annual rate of inflation, which eased to 42% in January after the central bank ramped up interest rates.
That’s helped turn Turkey into one of the world’s best carry trades, an investment strategy in which dealers borrow a low-yielding currency to buy a higher-yielding one. But Simsek says the goal is to draw in longer-term investments as opposed to hot money flows which risk prompting currency volatility.
2025 dollar/TL forecasts mostly envision deprecation against the USD of 20-25%, which would still yield a lucrative carry in short term TL assets such as liquid funds, SWAP/repo transactions and the short end of the yield curve.
The consensus estimate for Turkey’s main stock index BIST-100 currently stands at 14K points, promising an upside of ca 40% in TL terms, according to PA Turkey research.
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