As Turkey grapples with a deepening cost-of-living crisis marked by high inflation and a depreciating currency, the government is calling on citizens to remain patient while it intensifies efforts to attract foreign investment to stabilize the economy.
Treasury and Finance Minister Mehmet Şimşek acknowledged the public’s growing frustration over rising prices during a televised interview on CNN Türk. “Our citizens are right to complain; we have a cost-of-living problem,” Şimşek said. “We need patience and time.”
Şimşek outlined the government’s economic “roadmap,” claiming that Turkey has “left the most challenging period behind” and emphasizing efforts to reduce the country’s external vulnerabilities.
“By managing financial risks, we have overcome a significant hurdle,” he said. “To achieve lasting prosperity, we will bring inflation back down to single digits.”
Turkey’s annual rate of inflation has remained high, eroding purchasing power and widening income disparities. The central bank, which has held the policy rate at 50 percent since March, saw inflation drop below 52 percent in August following a peak of 75 percent in May.
Despite government measures aimed at stabilizing the economy, many Turks are struggling with the rising cost of essential goods and services.
“I visit markets and bazaars,” Şimşek said. “Our citizens approach us; their complaints are valid.”
He assured the public that steps are being taken to address the issue but cautioned that there are “no shortcuts” to resolving deep-seated economic problems. “In the second half of 2025, relief will be felt very significantly,” he projected.
Erdoğan seeks to woo investors in New York
Turkey is intensifying efforts to attract foreign investment. President Recep Tayyip Erdoğan and top economy officials are set to attend the 15th Turkey Investment Conference in New York from Sept. 23 to 25. The event was organized by the Foreign Economic Relations Board (DEİK), which represents 152 business councils aimed at promoting Turkey’s economic relations worldwide.
Erdoğan is scheduled to meet with American business leaders and executives from Fortune 500 companies, aiming to boost trade and investment ties with the United States. At last year’s conference, Erdoğan announced a goal of reaching a trade volume of $100 billion between the two countries.
On the second day of the conference, Finance Minister Şimşek and Trade Minister Ömer Bolat will meet with US fund managers and investors at an event hosted by Goldman Sachs. Energy Minister Alparslan Bayraktar and Industry Minister Mehmet Fatih Kacır will also have meetings with investors.
DEİK President Nail Olpak expressed optimism about the conference’s potential impact. “We believe the five separate events we will host over three days during United Nations General Assembly week will yield significant outcomes for our country,” he said.
Former deputy governor of the Turkish Central Bank İbrahim Turhan emphasized the importance of assuring investors that Turkey’s current economic policies will remain consistent. “Foreign investors — especially those looking to invest in Turkish equities and bonds or to acquire companies — want confirmation from officials that the current economic policies will be maintained,” Turhan told Voice of America Turkish service.
He added that Turkey’s recent application to join BRICS — a group of major emerging economies including Brazil, Russia, India, China and South Africa — is unlikely to deter Western investors. “Maintaining such connections is advantageous for Turkey, given its geopolitical relationships,” Turhan said. “Turkey’s BRICS application does not cause discomfort among investors.”
Gov’t spending surges despite austerity calls
Despite calls for austerity, Turkey’s budget deficit reached a record 1.97 trillion Turkish lira (approximately $58 billion) as of August, according to the Ministry of Treasury and Finance. This marks a significant increase compared to the surplus reported during the same period last year.
Critics point to government spending, covert allowances (secret funds used by the presidency that lack transparency) and vehicle and airplane leases by government officials as contributing factors to the deficit. In August alone expenses for leasing aircraft reached a record 1.2 billion lira (about $44 million).
The BirGün newspaper reported that despite austerity directives, allocations in controversial budget items were exhausted before year’s end. “The bureaucracy is not practicing austerity,” the paper stated.
The İstanbul Planning Agency (İPA), affiliated with the İstanbul Metropolitan Municipality, released a “Wastefulness Report Card” criticizing the government’s spending habits.
“While citizens are expected to save under economic crisis conditions, the government is not pursuing austerity,” the İPA report said.
A scheme introduced to stabilize the Turkish lira resulted in a public loss of a trillion lira (approximately $30 billion) over two years. The program was aimed at encouraging citizens to keep their savings in lira by compensating for currency depreciation but ended up costing the government significantly, the İPA said.
Expenditures on infrastructure projects carried out through public-private partnerships are not transparently reported and often significantly exceed initial investment costs. For example, the Kınalı-Odayeri section of the Northern Marmara Highway had an investment cost of $1.04 billion, but the government guarantee payments reached $2.5 billion — more than double the investment, the İPA noted.
There are substantial increases in central government expenses, including printing, office supplies, vehicle maintenance and advertising.
“Our people are living under difficult conditions,” the report concluded. “It is expected that the central government start with itself in combating wastefulness and use public resources effectively and efficiently.”