Addressing the General Assembly Meeting of the Banks Association of Türkiye, Minister Şimşek expressed confidence in the Turkish economy's trajectory despite challenging global financial conditions.
In his address, Minister Şimşek stated that the country's growth performance remained robust, with an average real growth rate of 5.4 percent between 2003 and 2022. He revealed that, despite the current global financial uncertainties, a growth rate of approximately 4.5 percent is anticipated for 2023.
"The reduction in political uncertainty post-elections and the strategic measures we've taken in monetary and fiscal policies are yielding positive outcomes for the Turkish economy," Minister Şimşek emphasized.
He further underlined the significant improvements in the country's risk profile, which saw a reduction in risk premium from 700 basis points to around 400 basis points. This adjustment has facilitated favorable external funding opportunities for various economic players.
Minister Şimşek revealed that Turkish Eurobond yields bucked the global trend by dropping more than 100 basis points, demonstrating increased investor confidence. Notably, international credit rating agencies have also revised their outlooks on Turkey, with recent changes indicating a more positive stance. This includes a banking sector outlook upgrade from negative to stable by a credit rating agency in the past week.
Moreover, the Minister highlighted the influx of capital into Turkish capital markets, attributing this development to the improved economic landscape. These collective improvements have not only made external financing more accessible but have also significantly reduced its cost, paving the way for a healthier financial environment.
Addressing the concerns around the banking sector's net interest margins, which previously suffered from negativity, Minister Şimşek asserted that these challenges are largely behind them. The sector, he stated, is now on a path of stability and strength, driven by high asset quality and a robust capital structure.
In the future, Minister Şimşek projected further enhancement of financial stability through comprehensive reforms within the financial ecosystem. These initiatives will be supported by a financial architecture and infrastructure strengthening program, positioning the Turkish economy for sustained growth.
As the country navigates through a dynamic global economic landscape, the optimistic outlook presented by Minister Şimşek underscores the government's commitment to steering Turkey's economic trajectory toward resilience and growth. (ILKHA)
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