Mehmet Şimşek says 'there is no systemic problem' regarding developments in fund markets

Treasury and Finance Minister Mehmet Şimşek, in his assessment of recent developments in fund markets, stated that relevant institutions have taken swift action and that they do not see a problem across the system as a whole.

Participating remotely in the Global Emerging Markets Conference organized by S&P Global, Şimşek stated that troubled portfolio management companies and related funds have been "placed under quarantine," and that the liquidation and resolution process for the funds in question has begun.

We acted very quickly and placed the troubled portfolio management companies and related funds under quarantine. The liquidation and resolution process for the funds in question has begun. Our goal here was to stop the contagion from spreading to the rest of the system, and we believe we have been largely successful in this. Of course, there was a limited impact, but we are not talking about a systemic problem. We will continue to deepen capital markets.

At the conference, Şimşek also made assessments regarding the global economy, geopolitical tensions, and the Turkish economy. Emphasizing that Turkey has an open economy dependent on energy imports, Şimşek said that geopolitical fractures are significant for Turkey.

ECONOMIC PROGRAM AND INFLATION MESSAGE

Stating that they expect growth in the Turkish economy to be around 3 percent this year, Şimşek said that the ratio of the current account deficit to national income might be slightly above expectations, but that it is at a manageable level. Arguing that budget performance has remained strong according to targets, Şimşek said that the economic program was designed to absorb global shocks.

Touching on the inflation outlook, Şimşek stated that weakening demand will be effective on pricing behaviors over the next 12-18 months. Expressing that core goods inflation is below 16 percent, Şimşek noted that the trend in energy prices will be decisive for the disinflation process.

Regarding the impact of the war on inflation, Şimşek cited Central Bank calculations and said that if it were not for war conditions, inflation could have been approximately 7 points lower. He stated that progress has been made in rent and education items in services inflation, while there has been an exception in transport services due to the war.

Responding to a question about early election discussions, Şimşek argued that speculations in this direction are baseless. Stating that there will be no change in direction in the economic program as the election process approaches, Şimşek said, "there will be no room for populist deviations."

Minister Şimşek stated that increasing the supply of social housing, active labor market policies, supporting SMEs' access to finance, and steps to improve income distribution are among the priorities in the coming period. Stating that these topics are foreseen in the 2027 budget, Şimşek expressed that these do not mean a comprehensive election economy.