ANKARA, Oct 1 (NNN-ANADOLU) – Turkey laid out a new three-year programme to recover its economy, with ambitious targets, including a surge in growth and a slowdown in inflation.
During a presentation in the capital, Ankara, Turkish Treasury and Finance Minister, Berat Albayrak, said, consumer price growth forecast has been revised to an annual 12 percent, at the end of this year, from 15 percent in Aug. Last year’s government predictions were 15.9 percent for 2019.
Gross domestic product (GDP) will expand by 0.5 percent in 2019, and five percent during the following three years, he said.
The country’s “inflation targets are set as 8.5 percent next year, six percent in 2021 and 4.9 percent in 2022.”
“We achieved a soft landing,” said Albayrak, adding, indicators suggested a recovery in the current third quarter, following three consecutive quarters of year-on-year contraction, after last year’s currency turmoil.
Albayrak said, the growth will also generate around one million new jobs per year, during the 2020-2022 period, to reduce unemployment rate gradually.
“After closing 2019 with an unemployment rate of 12.9 percent, we aim to reduce the figure to 11.8 percent next year, 10.6 percent in 2021, and 9.8 percent in 2022,” he said.
Turkey’s economy has recovered from the difficulties it experienced since the end of last year, but the country should undertake additional reforms because it remains vulnerable to a variety of risks, the International Monetary Fund (IMF) said.
“Turkey remains susceptible to external and domestic risks, and prospects for strong, sustainable, medium-term growth look challenging, without further reforms,” IMF said, after an official visit to the country.
IMF pointed out that, the positive market sentiment provided Turkey an opportunity to enact additional reforms that would not only address existing vulnerabilities but would also strengthen policy credibility and set the economy on a higher and more sustainable growth path.
Turkish President Recep Tayyip Erdogan, accused Western countries, primarily the United States, of triggering the economic crisis that Ankara faced last year. He said, his country has managed to overcome the critical period without external support.
“This report showed that IMF is in fact not too pessimistic about the Turkish economy. I believe that the most important point in the report is the emphasis on the need for reforms,” commented Burak Arzova, a professor of Finance and Accounting from the Istanbul-based Marmara University.
Last year’s crisis chopped around 30 percent off the value of the lira and sent inflation in Turkey to a soaring 25 percent, leaving construction and other companies with large foreign loans deeply in debt.
After a massive interest rate hike, the Turkish central bank has slashed 750 basis points in rates, in the last two months to encourage domestic demand.
Albayrak also said that, the budget will be used to finance what he called, a production-based “transformation” of the economy, amid investors’ concerns that Ankara is lagging in structural reforms.
While the government struggles to balance its macroeconomic indicators, ordinary people are very vulnerable to price hikes, despite a steady decreasing inflation.
