“GROWTH WILL BE BALANCED”: SIMSEK
During an interview on FOX TV last week, Deputy Prime Minister responsible for the economy, Mehmet Simsek, outlined his government’s plan for spurring fast-paced but sustainable growth for the second half of 2018.
“We need to provide more radical transformation to get more than 7 percent growth,” he said. “Growth will be stabilized in the second half of the year and demand will soften. We are already taking measures to get price stability and reduce the current deficit to a reasonable level. Normalizing monetary policy has been achieved. We took an important step; we fixed that part. Foreign demand in tourism is alive. This will help us. We already foresee a 7.4 percent growth in the mid-term.
“Turkey has had a run of bad luck. These are ripple effects of the chaos in the Middle East, terrorist organizations, the traitor Gulen coup attempt, and regional and global developments. These of course impacted negatively on the perception of Turkey. The lira has been depreciating as a result of this. Monetary policy needed to be tightened to support the lira. We did that. Last year our treasury borrowed at 11.4 percent, our inflation rate was 11.9. The amount of permanent investments in Turkey declined a little. But Turkey was only getting $750 million annually between 1980-2002. It got $12 billion a year over the last 15 years. Direct investments declined when compared with that peak.”
“We have grown almost 8-10 times in every category” “If you look at the GDP in terms of expenditure, the share of consumption has always between 2/3 and 3/4. In 2002, our citizens bought 7,000 tractors; last year 73,000 tractors were bought. 91,000 cars were sold in 2002; 723,000 last year. The number of people travelling abroad in 2002 was three million; last year it was 8.9 million. Since 2002, we have grown almost 8-10 times in every category.
“The main thing is that growth is to be inclusive with a fair distribution of income. These problems are also being discussed around the world. In this sense, we say that growth will be balanced in the second half. The current account deficit is an instability. We are taking measures to reach price stability and reduce inflation. We achieved the simplification of monetary policy. We made important steps there. The Central Bank raised the policy rate, thus supporting the lira. In fact, we should have been more proactive and taken the necessary precautions earlier. Even if it is late, we took the right step.
“The U.S. is withdrawing money in circulation. This in general has caused the dollar to appreciate and spurred an outflow from emerging countries. The rise in oil prices also affected us negatively. A similar situation emerged in Argentina. They increased the interest up to 40 percent but they could not control it. They recently signed a $50 billion deal with the IMF. Now Brazil is under pressure.”