Minister of Finance and Finance Mehmet Şimşek stated that uncertainties in global trade policy continue and announced that the Turkish economy has become less fragile in the face of difficulties.
Speaking at the 16th Bosphorus Summit, Minister of Finance and Finance Mehmet Şimşek said: “Türkiye's growth is largely based on domestic demand and services exports are expected to exceed $65 billion on a net basis this year. If trade fragmentation has become the new normal, how will Türkiye deal with it? We are less fragile because the majority of our trade is towards countries with which we have free trade agreements.”
“THE COMPLEXITY IN ARTIFICIAL INTELLIGENCE”
Minister of Finance and Finance Mehmet Şimşek attended the second day of the Bosphorus Summit whose main theme was 'Global Challenges: Adapting to the New Reality', organized for the 16th time this year by the International Cooperation Forum (IIP). Speaking here, Şim? high global debt, aging populations. Artificial intelligence promises huge potential to increase productivity, but at the same time the picture is complex.” about whether technologies are shared and regional differences. Climate is approaching: “Disasters are another concern and when we look around we see a lot of conflict and tension.”
“LOW GROWTH HAS BECOME THE NEW NORMAL”
Stating that global growth expectations are at a modest level, Şimşek said, “This is the global picture that we are seeing and this is the theme of this year's Bosphorus Summit. So what does this mean? It means that global growth expectations are at a modest level. The IMF publishes its five-year growth forecast every year and in the last few years it has been around 3%. Previously, before the global financial crisis demand, in the face of developments such as trade protectionism, predictions are made for real GDP growth of about 4.5 to 5% over 5 years. Therefore, low growth “has clearly become the new normal. So how did Türkiye perform? When you look at the last century, real GDP growth was about 4.8%. If you look at the last 22-23 years, the rate has reached 5.5%,” he said.
“OUR SERVICE IS BEYOND IMPORTANCE”
Şimşek said, “Which countries do you want to invest in? Countries that grow based on domestic demand and exports of services. Because protectionism has not yet affected the services component. We are talking about the kind of protectionism that we see in goods trade. Therefore, when we look at these countries, I think Türkiye will be one of them. Türkiye mainly relies on growth based on domestic demand and exports. services is expected to reach more than $65 billion on a net basis this year. If trade fragmentation has become the new normal, how is Türkiye coping with this? We are less fragile because the majority of our trade “We have free trade agreements with 54 countries and if we include trade within our close geographical area, more than 80% of all exports are done with friendly countries. As you can see, we think we will be less fragile. As I said, our service surplus is key at this point. But of course, we're not going to sit back and wait to see if trade fragmentation affects us. In this context, we are trying to implement the New Development Path, which will stretch from the Persian Gulf to Türkiye.”
“Global debt ratios have increased rapidly over the past few years”
Şimşek said, “The global debt ratio has increased rapidly in the last few years. While Türkiye's total debt ratio is 89%, the ratio in the world and in emerging markets is around 240 to 320. What does this mean, what advantage does it give us? If you have the financial space, you can deal with global challenges. For example, transformation and implementing structural reforms requires resources. Low debt and a strong financial position means you can allocate resources to the challenges you face, even if you are not prepared. Of course, we also prioritize investment in infrastructure to increase efficiency. “We give,” he said.
“Applications that benefit from a large language model will be encouraged”
“Today's technology is not working well, too fast or too slow. If you look at the AI readiness index, it is an index created by the IMF to evaluate developed and developing economies. We are in better shape than developing markets. Over the next few years, we will invest in fiber capacity expansion, 5G+ investment, which is continuing, large data centers and nuclear power plants,” Şimşek said. Because artificial intelligence requires energy. We are not in the race to create large language models, although there are some Turkish companies trying to do this. “What we want is to encourage applications that will benefit from these large language models, because this is where productivity will increase mainly,” he said.
Minister Şimşek said, “The green transition is another strategic area for Türkiye. $90 billion in irrigation investments have been made in 20 years to fight global warming, and climate and renewable energy laws have been passed. According to Oxford and Cambridge research, Turkey ranks sixth in its potential to make the world greener. Additionally, the green transition offers market opportunities.” new market worth $4.5 trillion by 2030.”
“We are living in a period dominated by conflict,” Şimşek said. “Defense spending is expected to increase significantly in the coming period. 20-25 years ago, defense spending was about $1-1.2 trillion per year. Annual defense spending is expected to increase to $6 trillion over the next decade. Why? Because NATO countries have pledged to increase defense spending and the European Union has eased financial restrictions. We're talking about going from $2.7-2.8 trillion to $6 trillion. Türkiye is very good in this field.” 1,400 active projects, meaning the product is in development.”
