Turkish Finance Minister Mehmet Şimşek on Economic Stability: Current Account Deficit No Longer a Major Issue
Turkish Finance Minister Mehmet Şimşek has made significant statements regarding the country’s economy, emphasizing increasing economic stability, confidence, and resilience. According to Şimşek, the current account deficit is no longer considered a critical issue.
Şimşek provided insights showing that as external debt’s ratio to national income decreases, the accumulation of reserves is accelerating. In May 2023, the annual current account deficit fell to $25.2 billion, marking the lowest level since June 2022. Alongside this reduction in the current account deficit, Şimşek highlighted that the positive external financing outlook persists. In the first five months of 2023, portfolio inflows reached $19.1 billion.
Furthermore, long-term external debt rollover ratios for the banking and real sectors rose significantly from 97% and 73% in the January-May period of 2022 to 160% and 123% respectively during the same period in 2023. Şimşek stated that they expect the current account deficit’s ratio to national income to drop below 2.5% in the second quarter.
Şimşek underscored the aim to achieve a sustainable current account balance through structural reforms and economic transformation, which would permanently reduce Turkey’s need for external financing. These statements were released by the Turkish Ministry of Finance.
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