Ankara expects single-digit rates next year

ISTANBUL

Turkey will attain single-digit inflation and interest rates, President Recep Tayyip Erdoğan has said, adding that this will pave the way for investments, job creation and production.

“Private financial institutions have recently started to provide investment loans. This is crucial. The previously state-owned lenders would provide such credits. They [private banks] were reluctant [to extend such financing]. Now, both private and state-owned lenders are providing loans. Turning on the credit taps would encourage investors,” Erdoğan told public broadcaster TRT on Dec. 9.

As laid out in the New Economic Program for 2020-2022, the government’s target is to bring inflation down to single digits permanently, he said.

“We are going to achieve this target.”

The Central Bank’s Monetary Policy Committee will meet on Dec. 12 to decide on its key rates.

A survey of economists by state-run Anadolu Agency showed that the bank is expected to cut its main policy rate (one-week repo rate) by 150 basis points.

In October, the bank cut its one-week repo rate by 250 basis points, to 14 percent, down

The period of recovery has started for the Turkish economy, Erdoğan also said, pointing to a number of indicators.

“The seasonally and calendar-adjusted gross domestic product [GDP] has exhibited positive growth for the three consecutive quarters. The real sector confidence index rose 9.2 points in November. Confidence in the Turkish Lira is also growing,” Erdoğan noted.

The president stressed that foreign demand remains strong: “This is particularly important for the rebalancing process.”

He predicted that the number of tourists visiting Turkey, which amounted to some 41 million in January-October, will reach 50 million at the end of this year.