Turkish economic plan must be rational, Erdoğan adviser says

Turkey’s economic programme, to be announced on Thursday, must be rational and designed to deal with immediate economic problems, said Cemil Ertem, chief economic adviser to President Recep Tayyip Erdoğan.

The programme should also include a basic framework to carry out production-orientated reforms, Ertem said in a column for Daily Sabah on Wednesday.

The reforms will be carried out as Turkey seeks to deal with cost-push inflation and embarks on a development programme reminiscent of South Korea in 1997, Ertem said.

Turkish Treasury and Finance Minister Berat Albayrak, Erdoğan’s son-in-law, will outline details of the Medium Term Programme to reporters in Ankara. Expectations among investors are high that Turkey will slash costs in the budget and delay investment programmes in order to back tighter monetary policy by the central bank.

Ertem said old economic theories, such as the Taylor Rule on interest rates, subscribe countries to an international system based on the profits of major financial institutions and are no longer valid.

The solution to Turkey's economic problems needs a change in mindset and approach, reminiscent of that required to solve previously unsolvable murder mysteries, Ertem said.

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