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Optimistic Outlook for Turkish Economy: Finance Chief Simsek Targets Single-Digit Inflation by 2026

In a recent address at the London Conference 2024 hosted by Chatham House, Turkish Treasury and Finance Minister Mehmet Simsek outlined an optimistic vision for Türkiye’s economic future. Highlighting significant strides in economic stabilization, Simsek revealed ambitious targets, including achieving single-digit inflation rates by 2026.

Economic Progress and Challenges

Simsek began by acknowledging the substantial challenges Türkiye has faced. Despite these hurdles, he noted the nation's position as a major global economy, ranked 11th in purchasing power parity and 17th by current exchange rates. Recent economic measures have been instrumental in reducing the nation’s inflation, which peaked at 75% in May but is now on a rapid decline.

Fiscal and Monetary Policy Adjustments

Reflecting on past fiscal challenges, exacerbated by a devastating earthquake, Simsek detailed the proactive fiscal adjustments undertaken last year. These included tax increases and spending controls aimed at stabilizing the economy. He attributed previous inflation spikes to unconventional monetary policies and emphasized the revised strategies that are now in place to stabilize inflation expectations.


Projections and Market Confidence

Simsek projected a significant decline in inflation rates, anticipating levels in the low 40% or high 30% range by the end of this year. He expects inflation to decrease to 10% by 2025 and reach single digits by 2026. Additionally, Türkiye’s country risk premium (CDS) has notably reduced, indicating enhanced market confidence and improved access to foreign markets.

Focus on Economic Sustainability

Ongoing efforts to rebuild foreign exchange reserves and implement crucial structural reforms are at the forefront of Türkiye’s economic strategy. Simsek emphasized the program's priorities: achieving price stability, maintaining fiscal health, narrowing the current account deficit, and fostering structural transformations, including green and digital initiatives.

Positive Economic Indicators

Simsek reported a substantial increase in the Central Bank of the Republic of Türkiye (CBRT) foreign exchange reserves, which have risen by over $70 billion from the previous year. He also highlighted a marked improvement in the current account deficit, which has narrowed to an estimated 2-2.5% of gross domestic product from 6% last year. Furthermore, positive adjustments in the fiscal deficit were noted.

Future Outlook and Social Impact

While acknowledging the severe impact of inflation on citizens, particularly the 75% peak in May, Simsek underscored its regressive nature and its implications for inequality and political outcomes. He recalled a decade ago when inflation was under control and expressed confidence in the current program’s ability to restore stability. Increased confidence among domestic depositors, who are beginning to convert their holdings into Turkish lira, is a testament to growing faith in the economic reforms.

Impact of the Turkish Economy on Real Estate

The economic measures and projections presented by Minister Simsek are expected to have profound effects on Türkiye’s real estate market. As inflation stabilizes and market confidence improves, the real estate sector is likely to experience increased investment and growth. Reduced inflation rates will enhance purchasing power, making property investments more attractive for both domestic and international buyers.

The narrowing current account deficit and improved fiscal health signal a stable economic environment, which is essential for the real estate market’s long-term growth. Moreover, structural reforms, including green and digital initiatives, are poised to modernize the real estate sector, making it more sustainable and appealing to future investors.


Minister Mehmet Simsek’s optimistic outlook and strategic economic measures signal a promising future for Türkiye’s economy and its real estate market. With targets set for single-digit inflation by 2026, enhanced market confidence, and significant structural reforms, Türkiye is on a path to sustained economic stability and growth. These developments are expected to create a favorable environment for real estate investments, benefiting both current stakeholders and future investors.

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