Türkiye stresses positive impact of supply chain diversification after pandemic
Date
10/3/2024 4:58:57 AM
(MENAFN) Turkish Treasury and Finance Minister Mehmet Simsek emphasized the positive impact of supply chain diversification following the pandemic on Türkiye's Economy during his remarks at the Berlin Global Dialogue (BGD) 2024. He stated that the country has developed a “comprehensive reform program” designed to enhance its competitiveness, productivity, and potential growth. Simsek expressed Türkiye's openness to business and dialogue, indicating a willingness to engage with international partners in efforts to foster economic collaboration and growth.
Addressing the complexities of Türkiye's geopolitical situation, Simsek acknowledged the significant effects of the ongoing Russia-Ukraine war on inflation dynamics within the country. While Türkiye has successfully navigated various macroeconomic challenges, he noted that persistent issues like inflation will require additional time and careful management to resolve. He pointed out that while Türkiye has been grappling with a substantial current account deficit, this figure has improved in recent times, and the budget deficit—excluding expenditures related to earthquake recovery—has been brought under control, now standing at 1.6 percent of gross domestic product (GDP).
Looking ahead, Simsek projected that inflation in Türkiye could decrease to single-digit figures by the end of 2026, aligning with the experiences of other nations in their battle against inflation. He attributed these optimistic expectations to the government's commitment to a tight monetary policy and fiscal discipline, which have helped stabilize the economy. He also referenced a study by the International Monetary Fund (IMF) that warned of potential GDP reductions of up to 7 percent due to trade fragmentation, an impact comparable to the combined GDPs of Germany and France.
Simsek highlighted Türkiye's resilience amid trade fragmentation, underscoring the significance of the full Customs Union it shares with the European Union (EU). He articulated that this relationship ensures trade is conducted under agreed-upon rules, positioning the EU as a friendly trading partner. Furthermore, he noted that Türkiye considers its immediate neighbors—spanning Central Asia, the Balkans, North Africa, and the Middle East—as friends as well. He explained that Türkiye has capitalized on the diversification of supply chains post-pandemic, leveraging its geographical position at the crossroads of Europe and its rapidly developing neighborhood, combined with a competitive demographic and skilled workforce. Lastly, he highlighted that Türkiye has attracted approximately USD70 billion in foreign direct investments (FDI) over the past two decades, showcasing the enduring benefits of a friendshoring strategy despite the country's economic fluctuations.
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