Türkiye is still in the process of transitioning to a disinflation path and disinflation will come as monetary policy works, albeit with lags, says the country's treasury and finance minister.

Addressing a gathering of domestic and international investors in Istanbul on Tuesday, Mehmet Simsek outlined Türkiye's strategic program.

Simsek said that Türkiye aims to achieve price stability, restore fiscal health, narrow the current account deficit, rebalance growth, and implement structural reforms to boost productivity and competitiveness.

"There has been a course correction in monetary policy. So, we call it monetary policy normalisation, which means tightening," he noted.

He also noted that the compound interest rate is currently 56%, one year ahead of inflation, which markets expect to be roughly 38%, adding that the Central Bank thinks it has done enough regarding rates.

"But of course, there is going to be additional support in the form of selective credit and quantitative tightening," he said.

The transition period will last until this June, and after that, there will be a speedy disinflation period, he underlined. He also said Türkiye is reviewing expenditures and combating informal economic activity.

Good infrastructure development

Stating that Türkiye needs investments in energy, fiber optics, and the green transition, Simsek invited the private sector to participate in public-private partnership projects in Türkiye.

"As the government, we have invested about $258 billion over the past 20 years in infrastructure, (and) as the government, we need to invest another $200 billion," he noted.

He said that Türkiye has done well in road infrastructure and airports and is building a high-speed railway network, in which it needs to invest at least $70 billion over the next 30 years.

"Because that is key to competitiveness, that is also key to sustainability and resilience," he added.

On the country's official reserves, he said they had improved significantly since last May.