Turkish minister says economy on track despite slower growth

• Return to orthodox policies
• Fiscal consolidation strategy
• Disinflation will boost economy

Turkey’s finance minister has said the country’s economic transformation was on track and that the country was prepared to deal with slower growth.

Finance minister Mehmet Simsek said that tighter financial conditions, lower oil prices and a weaker dollar were likely to be disinflationary, boosting the economy.

“Growth is slower but we can live with that,” he said during a panel at the annual meeting of the European Bank for Reconstruction and Development.

Simsek, since his 2023 appointment, and the central bank had helped the country lure more investors, boost reserves and temper inflation by engineering a return to orthodox economic policies.

• Turkey’s annual inflation falls but target remains distant
• Under pressure: Turkey’s inflation and cost-of-living crisis
• Inflation and political strife test Turkey’s stability

But the detention of Istanbul mayor and main opposition leader Ekrem Imamoglu on March 19 triggered market turmoil that lowered the lira and drained central bank reserves, pushing it into a surprise interest rate hike in April.

Simsek said the economic transformation programme was “on track, it is working, it is delivering”. While revenue could underperform, continued fiscal consolidation could keep the current account deficit below the current 2% expectation, he said.