After his re-election, the Turkish president appoints a respected economist as finance minister. Experts interpret this as a sign of an economic change of course.
Ankara – On June 2, the new parliament met for the first time after the Turkish elections. The parliament of the old and new President Recep Tayyip Erdogan also includes the economist Mehmet Simsek, who is respected on the financial markets. The fact that the post of economy minister goes to former finance minister Mehmet Simsek is seen by experts as a sign of a change of course by the government, which has so far stuck to low interest rates to combat inflation.
Change of course in Turkey: Erdogan brings respected economist into the new cabinet. Mehmet Simsek is once again Turkey's finance minister. (Archive image) © picture alliance / Uwe Anspach/dpa
Erdogan appoints finance minister: change of course and end of low interest rate policy in Turkey
Inflation in Turkey had weakened over the past six months, but was still at a worrying 44 percent. The independent economic institute "Enagrup" calculates inflation even higher. Food prices in Turkey are skyrocketing, and a family's minimum wage is reportedly not even enough to feed a family.
Now it's time for a respected economist to turn things around. Experts see the appointment of Simsek after the re-election of Recep Tayyip Erdogan as an indication of a turnaround in Turkish economic policy. The president's previous course is considered to be largely responsible for the economic instability, as he adhered to low interest rates in order to fight inflation, contrary to classical economic logic.
Mehmet Simsek – Turkey's new Minister of Economy
- Mehmet Simsek is a Turkish politician and economist. He was born on January 1, 1967 in Kayseri, Turkey.
- After studying economics in Ankara and at the University of Exeter, he worked for various international banks. Among other things, he worked at Merrill Lynch in London as Vice President for European Equities. Subsequently, he headed the equity analysis and research department at Deutsche Securities in Istanbul.
- Simsek began his political career in Turkey in 2007 as a member of the ruling Justice and Development Party (AKP). In the same year, he was appointed Minister of Economy and held this post until 2009. He then served as Deputy Prime Minister and Minister of Finance from 2009 to 2018.
Change of course in Turkey: Erdogan wants to save the economy with Mehmet Simsek
In contrast, the 56-year-old Simsek is considered an advocate of conservative financial and economic policies. He is expected to seek to abandon the controversial low interest rate policy. The former international investment banker had already served as finance minister under Erdogan until five years ago, but was dismissed in 2018 after switching to the presidential system.
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Turkish economy: This could mean the change of course for holidaymakers and tourists
Now, contrary to expectations, Simsek is once again playing a relevant role in Turkish economic policy after the recent Turkish elections, after which Erdogan's victory more and more doctors are moving abroad. If his plans to raise interest rates are implemented, it could make travel to Turkey more expensive this year.
However, if he fails to oppose Erdogan's low interest rate policy, and his plan fails, the currency could depreciate faster than inflation rises. That would be bad for the Turkish economy; German tourists, however, could be pleased. They would benefit from a significant depreciation of the currency, and Turkey would become a correspondingly cheaper destination for them. (Ulrike Hagen)