Turkey has left behind another year that was quite active politically and economically, marked by firsts and significant changes. As we enter the new year, undoubtedly the most important information regarding 2024 was the local elections. Turkey went to the polls to elect its local administrators who will serve for five years.
The other most important information for this year was the economic measures taken by the Government. Effective steps were taken in the fight against inflation, aiming to put the economy back on a rational path. Undoubtedly, the fight against inflation seems to take time to yield results.
The government, aiming for economic growth, increased employment, and price stability, raised interest rates as part of its fight against inflation. In the latest decision announced in November, the interest rate was kept constant at 50 percent for the eighth consecutive time.
As of December, the interest rate policy implemented at the 50 percent level caused financial conditions to tighten and domestic demand to contract. Undoubtedly, with such high interest rates, it is becoming increasingly difficult for our businesses to sustain their existence, protect their capital, and fulfill their export commitments in the face of suppressed exchange rates.
During this period, weak demand in Europe, our main export market, prevents the compensation of the decrease in domestic demand through exports.
Although we state that the Turkish economy has entered a recovery process compared to the previous year, the economic contraction, unfortunately, continues to be a problem for our industrialists.
Macro and structural challenges that hinder potential growth, including high inflation, low productivity growth, and weakening foreign direct investment, are challenging the sustainable economy. With sound fiscal measures and ambitious structural reforms, economic growth can be unblocked.
Global economy will determine Turkey's economic outlook
Developments in the global economy are, of course, of close interest to Turkey. The ongoing war between Russia and Ukraine, which has lasted for approximately two years, continues to affect the whole world, especially Europe. The war between Israel and Palestine in the Middle East stands before us as a great humanitarian catastrophe. The risk of the war spreading in the region is growing every day.
Developments in the USA, one of the most important elections in world history, the situation in China in the Far East, the European Union, and especially Germany, will determine Turkey's economic outlook for 2025.
The world is now quite far from its old growth rates and stands on fragile ground. The European Union, our largest market, continuing in this situation, emerges as a factor challenging our export opportunities. The pressure created by China in the field of competition is challenging Turkish industrialists.
We must keep pace with technological development
A very different future awaits us. Therefore, as Turkish industrialists, we must keep pace with technological development. The Industry 4.0 transformation is of vital importance for countries like ours. We will pay particular attention to the issue of quality and quantity. It should not be forgotten that in the 4.0 transformation, we need a qualified workforce, not just quantity in the workforce. If we have difficulty producing technology, we should at least pay attention to creating human resources with the skills to make a difference when using that technology.
As we come to the end of the months on the calendar, let's not forget that time passes very quickly. With the hope that we will spend our time more efficiently and valuable in the new year, I hope that 2025 will be better than this year. I wish the new year brings peace and prosperity to our country and the world, and grants health, tranquility, and happiness to all of us.
Happy New Year…
ÖMER KARADENİZ
CHAIRMAN
This content has been translated using artificial intelligence technology.