Turkish finance chief stresses commitment to saving, fiscal discipline

Turkish Treasury and Finance Minister Mehmet Şimşek emphasized his government’s ongoing commitment to fiscal discipline and public-sector savings during a recent statement, highlighting significant progress in reducing expenditures over the past two years. According to figures released by the Anadolu Agency, Turkey managed to achieve savings of approximately 484 billion Turkish lira, equivalent to roughly $10 billion at current prices, in the 2024–2025 period. These savings surpass the combined budget of six key ministries for 2026, including the Ministry of Environment, Urbanization and Climate Change, the Ministry of Foreign Affairs, the Ministry of Energy and Natural Resources, the Ministry of Culture and Tourism, the Ministry of Industry and Technology, and the Ministry of Trade. The savings were realized through a series of austerity measures introduced in 2024, which targeted multiple sectors such as transportation, infrastructure, and energy consumption. The measures included strict controls on spending, enhanced monitoring systems, and improved reporting mechanisms. A dedicated information system was established within the ministry, allowing public administration bodies to input data and track their adherence to austerity protocols. This system enabled close oversight of the fiscal practices of 260 public entities, ensuring compliance with the new rules. According to the report, the proportion of expenditures related to austerity measures, excluding interest payments and earthquake-related expenses, declined significantly. In 2024, this share fell from the long-term average of 4.6% to 3.1%, and further dropped to 2.9% in 2025. These reductions reflect the effectiveness of the reforms aimed at curbing unnecessary spending while maintaining essential services. Şimşek noted that the government had already seen positive outcomes from its efforts, stating that “our determination for saving in the public sector is yielding results.” He also highlighted that the savings achieved exceeded the financial impact of the sliding-scale system introduced earlier this year to manage rising energy prices. Under this system, the government projected a potential revenue loss of 372 billion lira at current prices by year-end. However, the savings generated through austerity measures were found to outweigh this cost, demonstrating the success of the fiscal restraint strategy. Last month, Şimşek reiterated the government’s goal of narrowing the annual budget deficit to around 2.5% of GDP by mid-year, down from 2.9% in 2025. This reduction underscores the continued emphasis on fiscal responsibility and the broader objective of supporting economic stability. He stated that the government would persist in implementing stringent savings measures and expenditure controls, ensuring that the fiscal space gained is directed toward critical national priorities. The government has also focused on improving efficiency and resource allocation, aiming to bolster the disinflation process. By prioritizing strategic investments and limiting non-essential spending, officials hope to create a more sustainable economic environment. The success of these measures has been attributed to the implementation of robust monitoring frameworks and the active participation of public institutions in adhering to the new guidelines. As the country continues to navigate economic challenges, the focus on fiscal discipline remains central to its policy agenda.