During a recent meeting with journalists in Kayseri, Minister of Trade Ömer Bolat highlighted the ambitious goals outlined in the 2028 vision program, which was announced shortly after he took office on June 3, 2023. The program aims for $375 billion in goods exports and $200 billion in services exports over the next five years, supported by various strategies and initiatives.

Bolat noted that in his 14 months in office, he has engaged with nearly 1,300 delegations to address sectoral challenges and seek solutions. He reported that while imports surged to $376 billion in 2022, they successfully reduced that figure to $362 billion last year.

In light of the current turbulent global and domestic economic environment, Bolat emphasized that a new period of balancing and consolidation has begun, marked by concrete targets set in the new Medium-Term Program (OVP). He stated:

“To protect Turkiye's domestic and national industry, we have implemented legal measures against dumping, subsidized imports, and imports attempting to bypass customs regulations. This means enforcing the rules dictated by our customs regime and foreign trade policy. We have conducted antidumping investigations and difference-compensating tax assessments in response to identified unfair practices. We are already witnessing tangible results, with annualized imports declining to $343 billion, leading to an increase in our foreign exchange reserves and stability in exchange rates.”

He added that prices have stabilized over the past two to three months, with the disinflation process beginning to impact the economy positively since June. “We are strictly adhering to the laws governing foreign trade. We support just and fair trade practices and legal imports while opposing unfair practices. We see growth in domestic production and employment across various sectors, which is reflected in the overall increase in employment figures.”

Bolat also stressed the government's commitment to reducing input costs for exporters.

“We are dedicated to developing necessary support programs within our budgetary constraints and standing firmly behind our exporters. A new support program has been announced to further this goal,” he explained. “We are coordinating with the Ministry of Treasury and Finance and the Central Bank to facilitate access to financing and reduce costs. After September and October, as we expect inflation to fall below 50% annually, we anticipate a corresponding decrease in credit costs. Market trends indicate that this shift is already underway.”

Regarding recent trade developments, Bolat noted a significant decline in exports to Israel due to government policy decisions, which he fully supported. However, he expressed optimism about new opportunities emerging in other markets.

“This gap is not a loss for us; it’s an opportunity to send a strong message to the world, particularly Israel’s administration. Turkiye has taken a leading role in this regard, and we aim to fill the void created in other markets.”

In conclusion, Minister Bolat’s remarks reflect a proactive approach to addressing current economic challenges while fostering a resilient trade environment in Turkiye.

Bolat emphasized that the government's decision had a significant global impact, prompting a wave of support for Palestine in many parts of the Western world, leading to official recognition of the state of Palestine by several Western nations.

He noted that tangible results are beginning to emerge from the government's disinflationary policy, which aims to reduce inflation. He continued:

"Throughout the pandemic, the earthquakes, and the Russia-Ukraine war, our priority has been to prevent unemployment, boost employment, maintain a stable supply of goods, and protect the purchasing power of our citizens. We have provided financial resources to both producers and exporters at favorable rates while ensuring that wages for workers and retirees have increased above the inflation rate. As a result, consumer spending has remained strong, and tourism has thrived in 2022, 2023, and this year, creating significant demand for producers and sellers. However, we are now observing a slight decline in consumption due to tightened credit availability and rising prices, prompting a reaction from our citizens. Industrialists are bringing this trend to our attention, leading to a decrease in the tendency to raise prices. These decisions are not made lightly, but as inflation decreases, we expect a corresponding increase in export activities. A reduction in domestic demand will encourage our sellers and producers to seek new export opportunities in international markets. We anticipate seeing these effects in the coming months."

Minister Bolat reminded attendees that the Medium-Term Program (OVP) was announced on September 7 of last year. He highlighted that the Strategy Budget Presidency developed the OVP, and no updates have been made to the export targets so far.

Bolat added that they have remained committed to our target for 11 months, which is significant.

"Why is this important? Last year, global goods exports fell by 5 percent, and world trade decreased by 1.2 percent, while world services exports rose by 10 percent. With seven months of 2024 behind us, we have yet to see the anticipated rebound in the global economy and trade. However, reaching $261.5 billion in exports by July indicates that we are performing better than expected. This figure represents an increase from last year's $255.4 billion, exceeding it by $6 billion. According to the OVP, we have $5.5 billion remaining to reach our target. We are committed to working toward this goal, and we will assess the outcomes as the months progress. At this point, we do not foresee a downward trend in exports. Traditionally, autumn is a vibrant season for exports. The critical factor is that we are on the right path. Whether the final figure is $1 billion or $2 billion above or below expectations is less important than the fact that we have exceeded last year’s performance and achieved over half of our target."

Regarding service exports, Bolat reported that their service exports reached $101 billion, and the annualized figure currently stands at $106.5 billion.

"Our year-end target is $110 billion, and we are optimistic about achieving it. July, August, and September are peak months for tourism, and autumn typically brings an increase in transportation revenues. We are fully committed to meeting our targets."

Bolat highlighted the proactive measures taken to improve financing conditions, stating, "With God’s permission, as we see inflation decrease in the fall, we will all witness improved financing conditions in Turkiye."

He emphasized the government's commitment to enhancing access to financing and developing new financial instruments. While acknowledging that high inflation leads to increased input costs, he noted that prices tend to rise more rapidly than costs.

Ömer Bolat stressed the importance of safeguarding employees' purchasing power amidst rising inflation.

"We are working to stabilize input costs and create an economic environment where financing costs, inflation, and exchange rates are stable. The coordination of these efforts is overseen by economic management, and we are making progress in achieving our macroeconomic goals as outlined in the Medium-Term Program (OVP)."

Bolat clarified that the government does not adhere to a fixed exchange rate policy. He reported a significant increase in foreign exchange reserves over the past year, with an inflow of over $85 billion in foreign exchange resources since the March 31 elections. He noted that a small portion of this inflow comes from abroad, while the majority results from citizens and companies converting foreign currency into Turkish Lira.

Bolat explained that the exchange rate is a crucial tool in managing input costs. He assured that input costs will stabilize as inflation declines. "Moreover, the TL equivalent of imported inputs used for exports helps prevent cost increases at the current exchange rate. This provides a significant advantage. However, it’s important to recognize that when the exchange rate rises uncontrollably and rapidly, prices can surge in less than 24 hours. Our political leadership and economic management are acutely aware of this high sensitivity to inflation. This presents risks not only for exporters but for all industrialists as input costs have also risen. Our priority is to carry out this work in a balanced manner, which is what we are striving to achieve."

In response to inquiries about the influx of cheap products from certain Chinese websites, Trade Minister Bolat assured that the situation is being monitored closely.

"We have made the necessary decisions, and you will see the results soon."