Turkey’s economy is showing signs of a promising turnaround, as highlighted by Finance Minister Mehmet Şimşek. May’s figures reveal an 11.4% increase in exports and a 10.3% decrease in imports, leading to a $6 billion improvement in the trade balance. This positive development is expected to shrink the current account deficit to about 2.5% of GDP by year’s end, reducing reliance on foreign funding.The Turkish Exporters Assembly reported a record high for May’s exports at $24.1 billion, with the automotive sector leading at $3.2 billion. Despite high production costs and exchange rate volatility, 20 sectors saw an increase in exports, with the European Union being the largest market.The Central Bank’s net reserves have surged by $66.5 billion over two months, marking the first increase since 2020. This boost in reserves has led to an upgrade in Turkey’s credit rating by Fitch Ratings and Standard & Poor’s. Şimşek remains optimistic, asserting that the economic program is working well, with expectations that inflation will peak at 70% this year before decreasing.The government has introduced measures to combat inflation, including a pause on renting new buildings and cars. Şimşek reassured that fiscal discipline and structural reforms, particularly in taxation, will lead to a permanent decrease in inflation. The Finance Minister also highlighted the importance of reducing dependence on foreign energy and promoting renewable sources.
Key points
- Turkey’s exports increased by 11.
- The current account deficit is projected to fall to around 2.
- Central Bank’s net reserves increased by $66.
- Turkey’s credit rating has been upgraded following the positive changes in the economy.
- Finance Minister Mehmet Şimşek expects inflation to peak at 70% this year before declining.
4% while imports decreased by 10.
3% in May.
5% of GDP by the end of the year.
5 billion over the past two months.
