High budget deficits become nightmare for Mehmet SIMSEK, Turkey’s new Finance Minister

Mehmet SIMSEK, who held senior positions such as the Ministry of Finance and Deputy Prime Minister in AKP governments for many years, was excluded from the cabinet in July 2018 for advocating interest rate hikes, and returned to the cabinet at the ‘insistence’ of President Recep Tayyip Erdogan, with whom he personally experienced controversy at the time. Now SIMSEK is said to be very surprised that there is no flexibility in budget spending, at all.

Erdal Sağlam, an author from 10Haber, shared the information he obtained from concerned circles, in his article titled ‘High budget deficits have became Şimşek’s nightmare’.

NEW CENTRAL BANK GOVERNOR EXPECTED TO INTRODUCE INTEREST RATE INCREASES

Reminding that Hafize Gaye Erkan, who was appointed at the suggestion of Şimşek, is expected to have a high-rate policy rate increase as the Central Bank of the Republic of Turkey (CBRT) President, the journalist wrote, “But no matter how high the increase is made, it is obvious that if Şimşek cannot solve the budget deficits and it will be difficult to ensure the flow of foreign funds that are heavily relied on.”

SİMSEK: WE CAN ONLY WORK ON 9 PERCENT OF BUDGET EXPENDITURES FOR SAVINGS (quoted)

It is thought that Şimşek said that they could only work on 9 percent of budget expenditures for savings, but it was unlikely that the savings to be made would exceed 2-3 percent of the budget total. While it was learned that this situation was discussed at the Economic Coordination Board held last week, it is stated that work has begun on what can be done within the scope of the preparations for the medium-term program.”