Istanbul - Turkish President Recep Tayyip Erdogan embarked on a three-stop tour of Persian Gulf states, starting with a visit to Saudi Arabia on Monday. The primary aim of the tour is to explore trade and investment opportunities that could help revitalize Turkey's struggling economy.
Accompanied by around 200 businesspeople, Erdogan arrived in Jeddah and met with Crown Prince Mohammed bin Salman. He is also scheduled to meet King Salman during his visit. Business forums have been arranged in Saudi Arabia, Qatar, and the United Arab Emirates as part of Erdogan's three-day trip.
Before departing from Istanbul, Erdogan expressed his hopes of strengthening relations and cooperation in various fields. The focus of discussions will revolve around joint investments and commercial initiatives to be undertaken in the near future.
The visit comes at a time when Turks are facing challenges due to sales and fuel tax hikes, which the Finance Minister has deemed necessary for restoring fiscal discipline and curbing inflation. The official annual inflation rate declined to 38% last month from a peak of 85% in October, but independent economists estimate that the actual rate was around 108% in June.
Turkey's current account deficit has reached record levels, amounting to $37.7 billion in the first five months of the year. Erdogan is looking to the oil- and gas-rich Gulf states to potentially help bridge this gap.
Recently, the Turkish central bank implemented a significant interest rate hike, signaling a shift toward more conventional economic policies, amid criticism that Erdogan's low-rate approach worsened the cost-of-living crisis.
Preceding Erdogan's Gulf tour, Turkish officials, including the Vice President and central bank Governor, held talks in all three countries. Turkey has been working on repairing ties with Saudi Arabia and the UAE, which were strained over the past decade due to various political issues.
Over the last two years, Erdogan's diplomatic re-engagement efforts with previously estranged regional powers have led to funding from the Gulf, which has alleviated some pressure on Turkey's economy. In particular, Qatar and the UAE provided approximately $20 billion in currency swap agreements, while Saudi Arabia deposited $5 billion into Turkey's Central Bank in March.
Additionally, after Erdogan's recent reelection, a trade deal potentially worth $40 billion over the next five years was signed between Turkey and the UAE.
Erdogan is set to meet Qatar's emir in Doha on Tuesday and the President of the United Arab Emirates (UAE) Sheikh Mohammed Bin Zayed Al Nahyan at Al Watan Palace in Abu Dhabi on Wednesday, further solidifying economic ties with these Gulf nations.