The Independent Industrialists and Businessmen Association (MÜSİAD) held the "2023 Assessment and 2024 Expectations" programme with the participation of Minister of Treasury and Finance of the Republic of Türkiye Mehmet Şimşek. Speaking at the programme, MÜSİAD President Mahmut Asmalı said: "We believe that Türkiye's economy will be one of the fastest-growing countries in 2024 as well, and that it will achieve a growth performance above the world average in the new century of our Republic."
The MÜSİAD 2023 Assessment and 2024 Expectations programme took place in Ankara with the participation of Minister of Treasury and Finance of the Republic of Türkiye Mehmet Şimşek. At the meeting, which was also attended by MÜSİAD Branch Presidents and Members of the Board of Directors, MÜSİAD President Mahmut Asmalı expressed that Türkiye had not been able to bring out its potential sufficiently in economic terms in 2023 because of geopolitical developments and domestic reasons, but that they were hopeful about 2024.
“In the Republic's Second Century We Will Overcome the Middle-Income Trap”
MÜSİAD President Mahmut Asmalı, pointing out that Türkiye would display a clearly more positive outlook in 2024 with the new economic administration and the OVP strategies, indicated that Türkiye would escape the middle-income trap. President Mahmut Asmalı continued his speech as follows:
“As the global economy thus experienced one of the most difficult periods of recent years, Türkiye's economy of course also passed through an important year of testing. Türkiye, which achieved the success of being the 3rd fastest-growing country in the G20 with %5.6 in 2022, had entered 2023 with this motivation.
Indeed, in January, year-on-year increases of %10.3 in exports, %4.5 in industrial production, %33.9 in retail sales and %94.0 in total turnover were recorded; the unemployment rate had fallen to a level of %9.7. Together with this, unfortunately, our country, which faced the greatest disaster in its history as a result of the two major earthquakes centred on Kahramanmaraş on 6 February, experienced a great shock as economic activity was seriously disrupted in 11 of our provinces, whose share in GDP exceeds %10.0 and which account for %8.6 of total exports. Thank God, during the earthquake process, the state and our nation acted with a spirit of national solidarity and with extraordinary effort to bind the wounds, which made it possible for the reconstruction and rebuilding of our disaster-stricken provinces to begin swiftly.
Despite these earthquakes described as the “disaster of the century”, Türkiye's economy, which showed great resilience by growing %4.0 in the first quarter of the year, sustained this performance in the second quarter as well and, growing at a rate of %3.9, succeeded in decoupling positively within the global economy. Finally, growing at a rate of %5.9 in the third quarter of the year, Türkiye's economy managed to become the 2nd fastest-growing country in the G20 in this period after India, and thus achieved an important success by recording growth for 13 consecutive quarters.
At such a time when, together with the leading economies, our country too is confronting the problem of inflation and is in a process of monetary tightening, the acceleration of the growth rate of Türkiye's economy is a development that deserves appreciation. We have full confidence that our Türkiye, which has carried the flag of exports to more than 200 countries and has made very great strides in many fields from the economy to infrastructure and urbanization, from education to health, will sustain this success in the period ahead as well and, by overcoming the middle-income trap in the 2nd century of the Republic, will enter among the world's 10 largest economies.”
“We Must Put Forward New Tax Reforms”
MÜSİAD President Mahmut Asmalı, stating that Türkiye needs to carry out new reforms on taxation, said that a fairer tax model should be adopted.
President Asmalı continued his remarks as follows:
“We must not overlook the fact that fiscal policy is at least as effective as monetary policy in combating inflation. In this context, the “tax reform” that our esteemed Minister announced as good news in recent days becomes all the more important at this point. Particularly once the disruptive effect of the earthquake on the budget has passed, lowering and simplifying VAT rates and revising the SCT system within the scope of tax reform are major reforms that Türkiye's fiscal system needs.
Indeed, in Türkiye the share of indirect tax revenues not only does not fall below %60 but periodically approaches %70. This structure unfortunately distorts both tax justice and income distribution. Changing the income tax brackets is another of the reforms needed to make the tax system fairer. Our current 5-bracket tax system causes an unfair income distribution, especially for middle-income groups. Further tiering our income tax system and, as seen in international examples, adding sixth or seventh brackets will ensure that the tax burden on the middle class is distributed more fairly.”
“We Are Hopeful About 2024”
At the end of his speech, President Asmalı expressed that they were hopeful about export and inflation rates in 2024. President Asmalı said: “The price stability that will be established together with inflation, which we estimate will begin to recede especially after the second half of the year, will support Türkiye in reaching its long-term economic goals.”
Asmalı continued his remarks as follows:
“Reaching historic record levels in exports and employment, the positive course of the non-energy current account balance and the continuation of increases in industrial production without losing pace are each proof of our country's strong macroeconomic infrastructure. We have full confidence that, under the leadership of our President Mr. Recep Tayyip Erdoğan above all, our Minister of Treasury and Finance Mr. Mehmet Şimşek and all the other stakeholders of the economic administration, the process of growth focused on production, exports and employment will continue. We believe that Türkiye's economy will be one of the fastest-growing countries in 2024 as well and that it will achieve a growth performance above the world average in the new century of our Republic. On this occasion, we as MÜSİAD wish to state once again that, as always, we are ready to put our shoulder to the wheel so that our country makes a start worthy of the name of its “Century of Türkiye” claim.”
Minister of Treasury and Finance of the Republic of Türkiye Mehmet Şimşek, speaking at the MÜSİAD 2023 Assessment and 2024 Expectations programme, said: "In 2024 we will evolve from a tighter monetary policy towards a looser monetary policy. Economic growth in Türkiye followed a strong course in 2023. The gradual recovery in the EU will be positively reflected in export expectations."
“There Is an Important Window of Opportunity Before Türkiye”
Minister of Treasury and Finance Mehmet Şimşek spoke in Ankara at MÜSİAD's 2023 Assessment and 2024 Expectations programme. Şimşek said: "When we look at 2024, growth will follow a weak course. The decline in inflation will continue. There will be more supportive financial conditions at the global level."
Saying that there is also an important window of opportunity before Türkiye, Minister Şimşek continued his remarks as follows:
"In Türkiye the population is still relatively young and dynamic, and therefore there is a window of opportunity of 15-20 years ahead of it. The total indebtedness ratio, which is 333 percent worldwide, does not confront us as a problem in Türkiye at 117 percent. By upholding the OVP, in a period when such difficult global conditions have become the new normal, we are concerned with 'how we can turn these conditions into an opportunity for Türkiye'. If we can implement the OVP with the support of all segments of society, there are great opportunities for Türkiye. In the world we will evolve in 2024 from a tighter monetary policy towards a looser monetary policy. Economic growth in Türkiye followed a strong course in 2023. The gradual recovery in the EU will be positively reflected in export expectations," he said.
In his speech, Minister Şimşek added: “2024 will be a year in which we reap the results of our programme and make progress. Exports will recover in 2024. There is inflation that is consistent with the OVP but high. In addition, monetary tightening is within the remit of the CBRT. We foresee that it will remain tight for some time longer. I should also state that we expect an improvement in credit ratings.”
Minister Şimşek also delivered a detailed presentation at the programme attended by MÜSİAD Presidents and members.
At the same time, MÜSİAD also shared its 2023 Assessment and 2024 Expectations Survey, conducted with its members, with Minister Şimşek and the public at the programme.
