Mehmet Şimşek shares his hope regarding foreign investors: 'To start attracting them again'

Şimşek stated, "We hope to start attracting meaningful foreign direct investment again because these are non-debt-creating inflows."

Claiming that they prioritize the fight against inflation and fiscal discipline, Şimşek stated that while inflation is still high, it is falling, service prices remain sticky, and there is significant backward-looking indexation, particularly in rent and education.

Şimşek noted that volatility in food prices also poses a challenge, arguing that inflation expectations are improving, particularly among households and companies, albeit at a slower pace than in the markets.

"BUDGET DISCIPLINE"

"Nothing can replace good policies. What matters is sound policies and the good implementation of these policies," said Şimşek, explaining that this year they will combine tight monetary policy and tighter fiscal policy with a more supportive income policy. Şimşek expressed that the decline in inflation will continue this year, which will make expectations even more positive.

Regarding budget discipline, Şimşek recalled that Turkey has spent 74 billion dollars on earthquakes and reconstruction over the last two years. Pointing out that the expenditure for the reconstruction of cities is over 6 percent of the gross domestic product (GDP), Şimşek said that this is not just housing, but a difficult process covering all infrastructure.

Reminding that the budget deficit-to-GDP ratio was at a high level of around 5 percent last year, Şimşek stated that they aim to reduce the budget deficit to 3 percent this year and that the public debt-to-GDP ratio is hovering at the 25 percent level.

"WE HOPE TO START ATTRACTING FOREIGN DIRECT INVESTMENT AGAIN"

Şimşek assessed, "We hope to start attracting meaningful foreign direct investment again because these are non-debt-creating inflows." Explaining that they will encourage portfolio investors to extend maturities through the reduction of inflation and progress on the fiscal side, Şimşek said, "From the government's perspective, we want to be a net external debt payer starting next year."

Regarding debt management strategies, Şimşek stated that they will further develop Turkey's domestic bond market and that they foresee borrowing in lira, with less variable interest rates and fixed coupons, and extending the maturity.