Turkey says economic recovery plan is inspiration for doctoral theses

Turkish Treasury and Finance Minister Berat Albayrak lauded his government’s economic programme, saying policies enacted following last year’s currency crisis will be an example to the world’s future intellectuals.

Informed observers of Turkey can marvel at the economy’s resilience in the face of financial shock, Albayrak said in an op-ed for Bloomberg on Monday.

“Our near-perfect soft landing and the playbook we followed to make it happen may be the subject of doctoral dissertations for years to come,” Albayrak said.

Turkey’s economy is recovering tentatively from economic turmoil that peaked in August last year, when investors sold the lira in droves due to a political crisis with the United States and fears of economic overheating. The government is now targeting economic growth of 5 percent next year after an estimated 0.5 percent expansion in 2019. 

The economic recovery is being accompanied by a “remarkable” adjustment in the country’s current account deficit, Albayrak said. Credit for the narrowing of the deficit from 6.5 percent of GDP in the middle of last year to near balance this summer must be given to Turkish exporters, he said.

“It’s thanks to both our exporters’ tremendous entrepreneurial drive and a strong tourism season, supported by the modern transportation, energy and communications infrastructure we’ve built over the years,” Albayrak said.

Economic growth will be led next year by delayed household consumption and real investment, the minister said. The uptick should not compromise price stability or put unhealthy pressure on the current account, he said.

Albayrak said single-digit inflation is now within Turkey’s grasp after consumer price increases slowed from 25.2 percent last October to 15 percent in August. The decline can be attributed to factors including co-ordinated fiscal and monetary actions by the central bank and the government, containing food price inflation and voluntary price-cutting by the private sector, he said.

“Even now, rest assured, we understand that there is no room for complacency: Our fight will continue until inflation drops permanently to low single digits,” he said.

Albayrak said the government has given the banking industry a clean bill of health following a thorough review of their asset quality, which revealed $8 billion of loans that needed to be re-classified as non-performing.

“With the incentives in the new law on out-of-court financial restructurings, this will address concerns about the transparency of bank balance sheets,” Albayrak said.