Mehmet Şimşek: Turkey does not need money

The Grand National Assembly of Turkey (TBMM) convened under the chairmanship of Deputy Speaker of Parliament Bekir Bozdağ. The 2024 budget of the Ministry of Treasury and Finance was approved in the TBMM General Assembly.

Treasury and Finance Minister Mehmet Şimşek began his speech at the TBMM General Assembly during the budget negotiations by wishing God's mercy upon Saadet Party Kocaeli Deputy Hasan Bitmez, who passed away after suffering a heart attack, and extended his condolences to his family and loved ones.

In the General Assembly, Şimşek stated that the loss of momentum in inflation is very clearly evident and is evolving towards a path consistent with the 2024 targets, adding, "Indeed, if you look at inflation expectations for 12 months ahead, they have declined by 5 points in the last two months and have converged to our targets. We will likely accelerate the exit from the KKM (FX-Protected Deposit) scheme in the coming months as reserve accumulation strengthens."

Şimşek said, "We attach great importance to the modernization of the Customs Union with the EU. Indeed, it seems that a green light has been given to this with the recently released report. The risk premium of developing countries has fallen by 87 basis points since May, and Turkey's risk premium has fallen by more than 400 basis points." Şimşek added, "In 2024, we will provide 520 billion liras in direct and indirect support to the agricultural sector; this corresponds to 1.3 percent of the national income."

Recalling the previously announced Medium-Term Program, Şimşek stated that this program has given confidence to world markets and that the World Bank has increased its resource commitment to Turkey from 17 billion dollars to 35 billion dollars. Pointing out that a very serious flow of resources to Turkey has begun, Şimşek said, "In 2023, Turkey secured 7.9 billion dollars in financing from the World Bank alone for project and program financing. Global and financial conditions will be much more favorable. All our companies will be able to access cheaper financing. As we lower inflation, financial conditions will improve," he said.

Stating that the allegations that Syrians are not taxed do not reflect the truth, Şimşek said, "Foreigners in our country are subject to corporate tax if they establish a company, and to income tax if they engage in personal activities by opening a business. There is no tax exemption for Syrians or citizens of other countries. Syrians are required to pay taxes and they do."

Making assessments regarding the global economy, Şimşek expressed that the slowdown in trade, which is one of the main engines of global growth, is worrying.

Explaining that the financial conditions that tightened due to the fight against inflation have begun to loosen, and that global interest rate cuts are expected, especially after the second half of next year, Şimşek said, "This is also positive for our program. Because capital flows to developing countries will likely be more positive in 2024. In addition, commodity prices, which rose rapidly after the pandemic, have also been weakening since the beginning of the year. In such a global conjuncture, we are working to build a big and stronger Turkey together and to increase the welfare of our nation, and we have put forward a program."

Minister Şimşek emphasized that they are striving to turn global challenges into an opportunity for Turkey and continued as follows:

"For this, we are increasing predictability; our biggest priority for this is price stability. Therefore, the main goal of the Medium-Term Program is to ensure a permanent decline in inflation. Because we cannot achieve sustainable high growth and permanent prosperity in Turkey without lowering inflation. Rebalancing in growth, that is, a more moderate domestic demand, an improvement in the current account deficit where external demand makes a positive contribution, the re-establishment of fiscal discipline, reserve accumulation, and the exit from FX-protected deposit accounts are other priority goals of the program. We have covered significant distance since June to reach these goals, we have taken steps, and of course, there are reforms we will implement. All of these have reduced macro-financial risks. Our macro-financial stability is strengthening."

"WE WILL PERMANENTLY LOWER INFLATION"

Touching upon the fight against inflation, Şimşek said, "We are determined, we will permanently lower inflation. This is the top priority goal of our program. The monetary tightening process initiated for this purpose continues. We support monetary tightening with selective credit and quantitative tightening steps. While strengthening the coordination between monetary, fiscal, and income policies, we will prioritize structural transformation focused on productivity growth in the coming period."

"WORKING-AGE POPULATION IS A GREAT ADVANTAGE"

Şimşek said that the rebalancing in the economy, the increasing interest in the Turkish lira and Turkish lira assets, the increase in reserves, and its stable course support the fight against inflation.

Stating that monthly inflation has entered a downward trend since August, Şimşek said:

"The loss of momentum in inflation is very clearly evident and has evolved towards a path consistent with our 2024 targets. Indeed, if you look at inflation expectations for 12 months ahead, they have declined by 5 points in the last two months and have converged to our targets. The decline in annual inflation will manifest itself in the second half of 2024. We aim to reduce inflation to 36 percent by the end of next year and to single-digit levels in 2026. The market has started to buy into the targets for next year and beyond."

Stating that Turkey grew by an average of 4.8 percent in real terms in the first century of the Republic, Şimşek reported that it showed a better performance in the last 20 years, growing by 5.4 percent. Stating that when China and India, which are continent-sized, are excluded, growth in developing countries increased from 100 to 211, while in Turkey it increased from 100 to 288, Şimşek said, "Therefore, Turkey has very clearly demonstrated a strong growth performance, not only historically but also when compared with other countries."

Şimşek stated that growth in the last year was driven by domestic demand, and that a more balanced composition is needed for sustainable high growth, which their program aims for.

Minister Şimşek stated that with the policies they implemented, rebalancing began in the third quarter of this year, and growth is expected to be 4.4 percent this year, adding, "4.4 percent might seem low to you, but we are talking about growth around 1.5 times the world average, and we are growing 3 times faster than developed countries. Therefore, we continue to close the gap with developed countries in this sense. We have a 4 percent growth target for next year because the disinflation program will make domestic demand somewhat more moderate."

Şimşek stated that the question "Does this growth create employment?" is important, and indicated that according to the data, employment has increased and unemployment has fallen to single digits. Şimşek said:

"The growth of the working-age population is also slowing down in the world, but there is no such risk in Turkey yet. When we look at the last 15 years, the working-age population has increased by an average of 1.4 percent annually. The OECD country average is 0.4, and the EU is around zero. This situation limits potential growth in developed countries, but there is an important window of opportunity for our country. We will make good use of the next 15-20 years. Because the working-age population is a great advantage for us. To make good use of this opportunity, we are increasing the skills and competencies needed in the labor market and we strongly support these programs. We are strengthening the link between education and employment with vocational training programs. We are increasing qualified employment with green and digital transformation."

"WE WILL STRONGLY SUPPORT THE INCREASE IN OUR EXPORTS OF GOODS AND SERVICES"

Şimşek pointed out that their third important goal is to permanently reduce the current account deficit.

Reminding that the annual current account deficit exceeded 60 billion dollars in May, Şimşek stated that this figure fell to 50.7 billion dollars as of October and is expected to be around 44-45 billion dollars by the end of the year.

Şimşek said, "The steps we have taken towards rebalancing the economy, that is, the steps we have taken to lower inflation, strong service exports, normalization in gold imports, and the reduction of external dependency in energy in the medium term will continue to improve the current account balance. We foresee that the ratio of the current account deficit to national income will fall to around 4 percent this year, 3.1 percent next year, and 2.3 percent at the end of the program period. The necessary policies to reach these goals are in place, and we will strongly support the increase in our exports of goods and services, especially in the coming period."

Pointing out that there are very important ruptures in industrial and trade policies in the world, Şimşek explained that it is now fashionable for production to be done more domestically, that there are efforts to shift production done abroad to the domestic market, that supply from nearby geographies in production and trade has come to the fore, and that there are trends such as production and trade being done with friendly and allied countries. Şimşek continued his words as follows:

"Turkey's geostrategic position, our Customs Union agreement with the EU, our being an important member of NATO, and our deep historical and cultural ties with the nearby geography can turn these trends I mentioned into a significant advantage in favor of Turkey. To use this advantage, we are in an intense effort to further increase our trade with nearby and friendly countries. The agenda of a significant portion of my trips has been this. In this framework, we attach great importance to the modernization of the Customs Union with the EU. Indeed, it seems that a green light has been given to this with the recently released report. On the other hand, as a Ministry, we will continue to provide strong support for our service exports to double in the next 5 years.

In the past, we exempted half of the earnings obtained from architecture, engineering, design, and software, as well as education and health services provided to foreigners, from tax; now, provided that the income obtained is brought to our country, we are increasing this tax exemption to 80 percent. This is an exemption, but it is a correct exemption because it aims to bring permanent foreign currency to Turkey. We will support our economic policy with structural steps to ensure permanent improvement in the current account balance. In this framework, we have an intense agenda to improve the business and investment environment. We have held the Investment Environment Improvement Coordination Council meeting twice in the last few months, and we will get results."

"TURKEY DOES NOT NEED MONEY"

Minister Şimşek stated that they have put new programs into effect to support value-added production, and that they will deepen capital markets as they lower inflation, adding that they will reduce the dependence of firms solely on banks.

Şimşek stated that they will increase efforts to increase domestic and renewable energy capacity to reduce external dependency in energy, saying, "Especially in the coming period, we are accelerating the green and digital transformation. In almost all of my trips, one of the main agenda items has been green and digital transformation. We have not requested resources from anyone, we have not asked anyone for money, Turkey does not need money."

"WE ARE NOT IN A NEOLIBERAL APPROACH"

Emphasizing that investment, employment, production, and exports are their biggest priorities, Minister Şimşek pointed out that they support exports very strongly, especially in this challenging global conjuncture.

Explaining that they have increased Eximbank's capital by nearly 50 percent and increased the daily rediscount credit limit 10-fold, Şimşek stated the following:

"Now there is 3 billion liras of daily rediscount credit; it is not enough, we will increase it much more in January. We have set an upper limit on interest for these loans, and we have removed the 30 percent additional export revenue sale obligation in the use of these loans. In the coming months, we will further increase the daily rediscount credit limit and we will also review the 40 percent export revenue sale obligation. We are restructuring the investment-committed advance credit application framework, especially to support high-tech and strategic sectors."

Stating that they support sectors with a significant share in foreign trade and high-tech products, taking into account the current monetary tightening process, Şimşek said that the Ministry of Industry and Technology will perform technical competence within the scope of concrete criteria, banks will perform financial feasibility, and the Central Bank will make the final decision.

Şimşek said, "These loans are open to everyone, transparent, will have a 2-year principal grace period and a 10-year maturity, and the financing cost will be well below current market conditions. In summary, a 300 billion lira credit facility is being provided for the production of these 284 high-tech products in our country in the next 3 years. This will be done by the Central Bank for the last time. Because we will include this in the budget in the later period when we improve the budget; the right place is the budget. As you can see, contrary to your claims, we are not in a neoliberal approach."

Minister Şimşek explained that they have increased access to finance for firms experiencing collateral shortages, especially exporting SMEs, and that they have implemented a total of 16 support programs within the scope of Treasury-backed guarantees this year for foreign exchange-earning services, investment, project finance, manufacturing industry, entrepreneurship, and digital transformation, as well as for businesses affected by the earthquake.

Reporting that there were 92 thousand credit transactions within this scope and 172 billion liras of credit were given under Treasury guarantee, Şimşek said that on the other hand, they are also in an intense effort for early-stage companies to access alternative finance with the vision of developing the entrepreneurship ecosystem. Stating that they will continue to rationalize expenditures and direct resources to areas that will contribute to qualified growth, exports, and employment in the coming period, Şimşek emphasized that there is some rigidity in expenditures, but they will continue their efforts for savings even if it is one lira despite everything in the coming period.

Reminding that the budget deficit for this year was foreseen as 6.4 percent in the Medium-Term Program, Şimşek said, "It seems that the budget deficit will be well below this, and the budget deficit, excluding the earthquake, will likely fall below 3 percent. Turkey will meet the Maastricht criteria again this year, excluding the earthquake, because the earthquake is a one-time expenditure."

"WE WILL REVIEW TAX REGULATIONS THAT MAKE KKM ATTRACTIVE"

Minister Şimşek stated that they have mobilized all resources to rebuild the earthquake zone and meet the needs of earthquake-affected citizens.

Pointing out that one of the basic and important principles of the budget is "Non-Allocation" (Ademi Tahsis), Mehmet Şimşek noted the following:

"Collected revenues are taken into the budget and spent from the budget in areas determined by the Supreme Parliament. Was an earthquake fund established in 1999 and thereafter? No. Were earthquake taxes collected in an earthquake fund? No. Because according to the principle of Non-Allocation, budget revenues cannot be allocated to the execution of a specific service. They are recorded as general budget revenue. When you record it this way, the answer I gave in 2011 comes out. In 2011, I said 'to our farmers, to infrastructure'. I said it correctly. Because what I said is within the framework of the Non-Allocation principle."

Stating that some parts of some expressions in the press were cherry-picked, Şimşek said, "I said 'education, farmer, infrastructure' there. Therefore, I have listed almost all of them where tax revenues are spent in the budget. The expenditures we have made to cover the damages caused by the earthquakes experienced in the last 20 years are 1.6 times the taxes we collected in that context. If we add the renovation and strengthening works, the expenditures we have made are exactly 8 times the tax revenue we collected. The total tax revenue equivalent of the measures we took in July to heal the wounds of the earthquake is 404 billion liras, but the money we will spend for the earthquake from the 2023 budget is 762 billion liras. We will spend 1 trillion 28 billion liras to heal the wounds of the earthquake next year."

"NET RESERVES INCREASED BY 43.9 BILLION DOLLARS"

Pointing out that another important element of their program is reserve accumulation, Minister Şimşek said, "As of December 8, our reserves have increased by 43 billion dollars compared to the end of May, reaching the historical high level of 141.4 billion dollars. Net reserves have also increased by 43.9 billion dollars, rising to 38.2 billion dollars."

Stating that local banks swap with the Central Bank because the demand for foreign currency loans is low, Şimşek said, "Swaps made with local banks are a very routine business, but even if you exclude the swaps made with foreign countries, our reserves are in the positive, and that calculation is the essential one. The increase in our reserves reduces our country's vulnerability. It has strengthened financial stability."

Regarding FX-Protected Deposit (KKM) accounts, Şimşek said, "Observing stability in financial markets, we have taken and are taking the necessary steps for the exit from KKM, which is another important goal of our program. The KKM stock peaked at 3.4 trillion liras in August and has fallen to 2.7 trillion as of December 8. In the coming period, we will also review the tax regulations that make KKM attractive for companies and individuals."

Asking "Is the economic program we are implementing working, is it giving the results we expect?", Şimşek said the answer is "absolutely yes".

“WE WILL PROVIDE 520 BILLION LIRAS IN DIRECT AND INDIRECT SUPPORT TO THE AGRICULTURAL SECTOR"

Pointing out that Turkey's risk premium has fallen significantly, Şimşek provided the information, "The risk premium, which exceeded 700 basis points in May, has fallen below 290 points as of today. The risk premium of developing countries has fallen by 87 basis points since May; Turkey's risk premium has fallen by more than 400 basis points."

Şimşek stated that Turkey's borrowing cost is falling much faster than other developing countries.

Şimşek said, "Our country's bond 'spreads', that is, the difference with the American bond interest rate of the same maturity, were 200 basis points above the developing countries average in May, and currently we are 77 basis points below the developing countries average, meaning it has improved by 277 basis points."

Emphasizing that currency volatility has decreased and the Turkish lira has shown a more stable appearance compared to developing country currencies, Şimşek said, "The interest of international investors in Turkish assets has increased, meaning our country's access to external resources has increased. While there was a net portfolio outflow of 2.9 billion dollars in the January-May period, the net inflow in the June-October period is 4.2 billion dollars."

Stating that while banks were finding 96 dollars while paying 100 dollars of external debt in the January-May period, they can now find 141 dollars more cheaply, Şimşek noted the following:

"Our real sector's external debt rollover ratio has also increased from 74 percent to 109 percent, and these borrowings have taken place at lower costs. I believe that investor interest in Turkey will increase even more in the coming period. Therefore, we don't have a need to ask for money in the meetings we hold; there is currently much more resource flow to Turkey in the market than we desire. Banks, real sector, public… Therefore, Turkey does not have a resource need in that sense. Credit rating agencies showed it from here, true, but they are lagging behind. Currently, the credit rating implied by Turkey's 'spreads' is exactly 2 notches above Turkey's current credit rating. Let them lag behind, what is important for me is the market's pricing. The market prices correctly. They may lag behind, but despite that, the outlook of our ratings is improving rapidly."

"THE EQUITY PROFITABILITY OF THE BANKING SECTOR IS NOT AS HIGH AS CLAIMED"

Stating that the banking sector is strong, Şimşek noted that a healthy banking sector is needed for the healthy growth of the economy; and that the banking sector makes a very important contribution to growth.

Şimşek assessed, "There is a capital adequacy ratio well above world standards. Asset quality is extremely high. The ratio of non-performing loans to total loans is around 1.5 percent; 85 percent provision has also been set aside, meaning even if all of it were a loss, it would not affect the balance sheet. The liquidity adequacy ratio is at the 162 percent level, meaning its liquidity is also high, but the equity profitability of the banking sector is not as high as claimed; it is well below inflation."

Stating that they do not discriminate against the financial sector or banks in any way, Mehmet Şimşek said that on the contrary, they increased the corporate tax to 30 percent for banks and the financial sector.

Şimşek said, "There is a draft law on your agenda right now. There is an article about inflation accounting there. We are keeping banks out, and thus they will pay 70 billion liras in taxes that they would not normally pay. Therefore, the last thing you will say will be the issue that we favor the big business world and the financial sector."

Stating that they do favor certain segments, Şimşek said, "For example, we favor our farmers, our tradesmen, our artisans, our employees. We provide very serious support for our citizens to be protected from electricity and natural gas price increases, for the heating coal needs of our families in need to be met, for producers and consumers in agriculture, and for reasonable price formation. As of the end of November 2023, there is a 68 percent subsidy on natural gas used by our citizens in households; there is a 55 percent subsidy on electricity. Who is it for? It is for the citizen."

AGRICULTURAL SUPPORTS

Reminding that assessments were made that "no resources were transferred to the agricultural sector", Şimşek said that 384 billion liras were allocated to agriculture in the 2024 budget.

Stating that 91.6 billion liras were allocated for agricultural support programs; 100.6 billion liras for agricultural sector investment appropriations; and 191.8 billion liras for agricultural credit subsidies, financing of agricultural SOEs, and export supports, Şimşek reminded that earnings exemption in agricultural support payments and VAT exemption in agricultural water deliveries were introduced.

Şimşek noted the following:

"We are giving up exactly 136 billion liras in taxes in 2024 within the scope of tax supports provided from licensed warehousing activities for agricultural products and supports provided to our small-scale farmers. In 2024, we will provide 520 billion liras in direct and indirect support to the agricultural sector; this corresponds to 1.3 percent of the national income.

In 2023, we provided 295 billion liras in interest-subsidized loans to 1.8 million farmers through Ziraat Bank and Agricultural Credit Cooperatives. Do you know what this means? Our farmer takes the loan, while they should pay 100 liras of interest, they pay 30 liras, and the treasury pays 70 liras. Yes, therefore we are giving the strongest support to our farmer. In 2023, we provided approximately 153 billion liras in interest-subsidized loans to 421 thousand tradesmen and artisans."

"AS OUR WELFARE INCREASES, WE WILL SHARE IT MORE FAIRLY"

Stating that they supported the purchasing power of employees and retirees by making increases well above inflation in their monthly wages in 2023, Mehmet Şimşek said, "The 2023 year-end inflation realization estimate is approximately 65 percent. The lowest civil servant salary increased by 142 percent, the average civil servant salary by 129 percent; the minimum wage by over 107 percent, and the lowest pension by 114 percent. The inflation estimate is 65 percent, all increases are over 100 percent."

Reminding that they almost doubled the holiday bonuses of retirees and that a one-time additional payment of 5 thousand liras was made to retirees, Şimşek assessed, "Not just this year; for the last 21 years, we have not let our employees, retirees, and civil servants be crushed by inflation. In the last 21 years, the real increase in the lowest civil servant salary is 174 percent; the average civil servant salary increase is 111 percent; in the minimum wage, it is 201 percent; the real increase in the lowest pension is 455 percent. As a result, we have not let our employees and retirees be crushed by inflation in any period, and we will not. As our economy grows and our welfare increases, we will share it more fairly."

"WE ARE DETERMINEDLY FIGHTING AGAINST MONEY LAUNDERING AND TERRORIST FINANCING"

Treasury and Finance Minister Mehmet Şimşek stated that they are determinedly fighting against money laundering and terrorist financing, saying, "In 2023, we prepared reports and information about 14 thousand 525 people within the scope of 4 thousand 624 files and shared them with judicial authorities, law enforcement and intelligence units, and relevant public administrations."

Şimşek said that the average public debt ratio in EU countries is 83 percent, 67 percent in developing countries, and around 33 percent in Turkey.

Stating that the earthquake shock will affect the economy until 2026, Şimşek said, "According to our estimates, our debt stock at the end of 2026 will be around what it is today. Because debt is an important problem all over the world. The fact that debt is relatively low in Turkey also offers opportunities to Turkey."

Providing information about the main elements of Turkey's borrowing strategy, Şimşek said, "We will borrow within the framework of 3 criteria while borrowing next year. We are limiting the share of variable-rate bond issues to reduce the interest rate risk of the debt stock. To reduce the sensitivity of the debt to fluctuations in exchange rates, we will borrow mainly in TL. To reduce the refinancing risk of the debt, we will keep the share of bonds with less than one year to maturity at a certain level, that is, we will continue to extend the maturity."

Şimşek stated that the share of fixed-rate domestic borrowing in 2023 is 69 percent, the share of domestic foreign currency-denominated debt stock in the total debt stock is 12 percent as of November, and the average maturity of domestic borrowing was 65 months as of November 2023.

Stating that one should not look at the nominal increase in interest expenditures in a high inflation environment, Şimşek assessed, "In the last 22 years, the ratio of interest expenditures to national income has been 5.5 percent on average. It will be 2.5 percent this year and around 3 percent next year. Therefore, the ratio of interest expenditures to national income is not out of control as claimed. But if we cannot control budget deficits, then you would be right. That is why we have taken measures. We have to finance our deficit not only with debt, but permanently, healthily, with tax revenues, and keep our expenditures under control."

Reminding of the criticisms made against him due to his statement that they will expand the tax base, Şimşek said, "I meant that we will go after those who do not pay taxes and operate informally. We are not taxing the minimum wage earner anyway."

Şimşek noted that they do not tax the earnings of young people who establish new businesses up to 150 thousand liras for three years, that the state pays their Bağ-Kur premiums for one year, and that as a government, they are always by the side of tradesmen and all their employees.

Responding to criticisms that indirect taxes are too high, Şimşek said:

"The effective VAT rate in Turkey is 14.4 percent. However, we have taken additional steps here as well to ensure justice. We apply 1 percent VAT on basic food and social housing. Isn't this fair? The cost of the 1 percent VAT application to us is 110 billion liras. We have reduced VAT applications in many areas such as education, health, tourism, food and beverage services, textiles, agricultural machinery, agricultural irrigation, and electricity used in homes. Their annual cost to us is 61 billion liras. When we zeroed the VAT on feed and fertilizer to support our farmer, the annual cost is 49.5 billion liras. If you look at just these items, we have given up 200 billion liras in indirect taxes. We did these to ensure a bit of justice in taxation.

We apply the highest tax, the corporate tax rate, especially to banks and the financial sector. In 2023, 24 percent of all corporate tax was collected from banks. 24 percent of all corporate tax was collected from banks alone. Therefore, according to the draft law on our Parliament's agenda, banks will not benefit from inflation accounting this year and will pay an additional 70 billion liras in taxes."

Şimşek said that the claim that the tax burden in Turkey is high does not reflect the facts.

Stating that Turkey has the 3rd lowest tax burden among 38 OECD member countries with 20.8 percent in the general tax burden ranking in total taxes, Şimşek continued his speech as follows:

"The main problem in taxation in Turkey is not the highness of the indirect tax burden, but the fact that direct tax revenues are not at a sufficient level. The share of taxes taken on income and earnings in our country in national income is 5.8 percent. The OECD average is 12.3 percent. There is a rate of less than half of the OECD average. If we evaluate it with our national income this year, there is a difference corresponding to 1 trillion 650 billion liras. So why are direct taxes insufficient? There are two main reasons. First, there are serious exemptions and exceptions in income and corporate tax. For our farmer, minimum wage earner, tradesman, all segments. When you add them up, it already explains the difference I mentioned earlier to a significant extent.

The second is informality. We are determinedly fighting against money laundering and terrorist financing. In 2023, we prepared reports and information about 14 thousand 525 people within the scope of 4 thousand 624 files and shared them with judicial authorities, law enforcement and intelligence units, and relevant public administrations, and provided support. We are fighting against dirty money and the mafia. In this regard, the Ministry of Finance is the biggest supporter of our Ministry of Interior. We are also fulfilling the technical conditions for the Financial Action Task Force (FATF) to exit the grey list."

Şimşek reported that Turkey has become compliant with 39 out of 40 FATF standards, and that this was concretized with the letter sent to him from FATF's meeting in October.

Explaining that they only have one deficiency left, Şimşek said, "We will hopefully bring that in January. Legal regulation regarding crypto assets, but this is not enough. In addition, effectiveness in practice is required to exit the grey list. We have covered a lot of distance in terms of effectiveness in practice and we have shared these with FATF. Of course, this is a decision, it may not happen when even one country comes out and objects, but I believe that Turkey's progress will eventually be appreciated. Hopefully, Turkey will have exited the grey list next year."

Şimşek noted that their program, which aims to ensure macro-financial stability and continue sustainable high growth, has started to yield results, but that there are no shortcut, simplistic solutions to the problems that neither the world nor Turkey is facing, and that they must implement this program with patience and determination.

BUDGET PASSED BY PARLIAMENT

After the speeches, the 2024 budgets of the Ministry of Treasury and Finance and affiliated institutions were approved.

Deputy Speaker of Parliament Bekir Bozdağ closed the session to convene at 11.00.