Turkey’s finance minister said the country’s economic transformation was on track and that the country was prepared to deal with slower growth.

Finance Minister Mehmet Simsek said that tighter financial conditions, lower oil prices and a weaker dollar were likely to be disinflationary, boosting the economy.

“Growth is slower but we can live with that,” he said during a panel at the annual meeting of the European Bank for Reconstruction and Development.

Simsek, since his 2023 appointment, had, alongside the central bank helped the country lure more investors, boost reserves and temper inflation by engineering a return to orthodox economic policies.

But the detention of Istanbul mayor and main opposition leader Ekrem Imamoglu on March 19 triggered market turmoil that weakened the lira and drained central bank reserves, pushing it into a surprise interest rate hike in April.

Simsek said the economic transformation programme was “on track, it is working, it is delivering”. While revenue could underperform, continued fiscal consolidation could keep the current account deficit below the current 2 per cent expectation, he said.

He added that while geopolitical turmoil had, in recent years, been a drag on Turkey’s economy, that was now shifting.

“There are really strong signs that geopolitics may actually turn into a lifting factor, meaning a factor that is likely to help Turkey,” he said, citing developments in Syria, efforts to broker a peace between Russia and Ukraine and the decision by the Kurdistan Workers Party (PKK) militant group to disband.

Central Bank Deputy Governor Osman Cevdet Akcay, speaking on the same panel, said policy makers were committed to maintaining a tight policy stance, but that the country could avoid a hard economic landing.

“The pricing behaviour is going to be changing more drastically if they (Turks) are afraid of a hard landing, which would provide a faster consolidation, which would help us,” Akcay said.

“Therefore what we are trying to push for…is through tight stance for low disinflation,” he said, adding “the more they take that into account, the lower is the likelihood of hard landing.”