Union of Chambers and Commodity Exchanges of Turkey

TOBB President M. Rifat Hisarcıklıoğlu, in his speech at the opening of the meeting, stated that trade wars and protectionism are spreading in the world; global growth and trade are slowing down, and said, “Our country’s economy is also negatively affected by all these, but we do not give up the struggle.”

Hisarcıklıoğlu said that they started the “TOBB Türkiye Economy Summit,” which is the biggest platform that brings together the business world and public administration, together with the government in 2003.

Emphasizing that they have contributed to strengthening the culture of consultation between the public and private sectors in Türkiye, Hisarcıklıoğlu said, “We are going through a difficult process in the economy. Trade wars and protectionism are spreading in the world; global growth and trade are slowing down. Our country’s economy is also negatively affected by all these, but we do not give up the struggle. Like today, we wish to see our state always by our side.”

- “We will continue to grow the economy with stability”

Hisarcıklıoğlu stated that they will continue to grow the economy on a more solid foundation and with stability, and that the presidents of chambers-exchanges and sector councils are acting with this vision. Stating that the presidents collected the main problems experienced in the real sector and the market in 81 provinces and prepared solution proposals, Hisarcıklıoğlu continued as follows:

“I am constantly traveling around Anatolia, constantly listening to companies and sectors. The biggest problem I see is access to credit. Both the restrictions on credit growth and high interest rates are shackles on the feet of our SMEs in particular. Payments in the market are disrupted, shopping decreases, and as a result, the growth of the economy slows down. To overcome these problems, we need to give positive discrimination to SMEs. We should exclude them from the monthly credit growth limit. We should also exclude commercial credit cards from this limit. We need to prevent the real contraction of existing credit limits, so that we can bring relief to the market.”

Pointing out that although these enterprises are large in number, their share in the total credit volume is small, Hisarcıklıoğlu stated that the positive approach to be applied will not disrupt the macro balances.

- Use of the CGF

Hisarcıklıoğlu reminded that yesterday President Recep Tayyip Erdoğan made an important statement on access to credit and instructed new preparations for the use of the Credit Guarantee Fund, and said, “This morning, our Minister of Treasury and Finance announced that a 30 billion lira loan package for manufacturing SMEs will be activated. We also have to increase support for exports. Because we are facing a new global environment that we have never experienced before. The US has increased tariffs. The highest increases were applied to many Far Eastern countries, especially China. What happens if China cannot sell as much to the US as it used to, so it sends its remaining stocks and goods to other markets? In non-US markets, Chinese competition becomes even more fierce than before.”

- “Let’s not restrict ourselves with some global regulations from yesterday”

Hisarcıklıoğlu reminded that a small example of this happened in the past, that when the real estate bubble burst in China in early 2020 and the construction boom suddenly ended, the construction machinery in hand started to be sold to other countries, and that China’s share of global machinery exports, which was around 3 percent in 2005, increased to 21 percent in 2023:

“Let’s not restrict ourselves with some global regulations of yesterday. Let’s definitely bring new and proactive supports to exports. You have provided very serious increases in export rediscount credits. We need to continue this to compensate for the increase in the real value of the Turkish lira. We need to increase the rediscount credit volume to the level of 3-month exports, i.e. 65 billion dollars. Let’s prioritize labor-intensive sectors. Because they are in danger of losing their competitiveness and export markets due to rising input costs. Additional support should be given to labor-intensive sectors, especially textiles and ready-to-wear clothing. As in the pandemic period, short-time working allowance should be activated and used actively.”

- Vice President Yılmaz

Vice President Cevdet Yılmaz said that the Medium Term Program (MTP) will be updated in September as is customary.

Stating that the program they are implementing has four main objectives, Yılmaz said that the first and most fundamental objective is to reduce inflation, establish price stability and provide a predictable environment for both the public and private sectors.

Yılmaz said that the second main objective of the program is balanced growth, and that they aim for more qualified growth not only through consumption but also through production, investment and exports.

Stating that the third goal is social welfare, Yılmaz said that they want to realize this permanently and that they aim to move forward with healthy and realistic policies, not with daily, temporary and deceptive solutions.

Emphasizing that the fourth goal of the program is the reconstruction process after the February 6 earthquakes, Yılmaz said that an average of 35 billion dollars is spent every year for this purpose and that the total expenditure will exceed 100 billion dollars by the end of the year.

- “Inflation will continue to decline”

Stating that inflation reached 75.5 percent in May 2024, the disinflation process started in June and the third stage of this process is permanent price stability, Yılmaz said:

“The disinflation process started in June last year and the annual rate of inflation has been on a downward trend for 11 months without interruption. It fell to 37.9 percent as of April. When we look at the leading indicators in May, we see that the inflation rate was below expectations, which was also the assessment of the Central Bank yesterday. So we can easily say that the downward trend in inflation will continue in this month as well.”

Yılmaz stated that the real sector brought up the issue of loans and credit costs and revealed the problems they were experiencing, and said: “Our basic approach to this issue is as follows; I want you to know that we will always act sensitively to the demands of our real sector without disturbing the main framework of our program, without weakening our main direction in any way. This has always been the perspective of our President. He has always been in favor of investment, production, exports and employment. He has always had a perspective in favor of the real sector. We are of course implementing the same policy. Therefore, we do the following; while controlling the general volume, we try to respond to the demands of the real sector in a selective manner. We do the same in our tax policies. We do the same in other areas as well.”

At the end of his speech, Vice President Yılmaz said, “We should not exaggerate the temporary problems experienced recently. These are temporary. I believe that a very different financial environment will emerge in the next few months. We can see this from a number of indicators and trends. Maybe the tightness in the financial markets is felt a little more at the moment, but I can express that there will be a more positive perspective in the coming months, a more positive perspective in macro terms.”

Following the opening speeches, the meeting continued closed to the press. In this section, the heads of chambers and stock exchanges took the floor and expressed the issues and solution proposals from the real sector.

In addition to Vice President Yılmaz, Minister of Labor and Social Security Vedat Işıkhan, Minister of Treasury and Finance Mehmet Şimşek, Minister of Industry and Technology Mehmet Fatih Kacır, Minister of Agriculture and Forestry İbrahim Yumaklı, Minister of Trade Ömer Bolat, Presidential Strategy and Budget President İbrahim Şenel and some deputy ministers also attended the meeting.