Deputy PM says Turkey cannot reach 5 pct growth target without reforms

“We can reach our 5 percent growth target as long as we speed up the reform process,” Şimşek said at the Forum Istanbul conference on May 6. 

“Meeting a medium-term high growth target depends on a strong implementation of structural reforms,” he noted. 

Saying that global markets had begun the year poorly, he added that a 3 percent growth would not have been thought possible in January.

“There are fundamental problems both in the Turkish [economy] and in the world,” he said.

The government believes Turkey will grow 5 percent in 2017 and 2018 in line with its medium term program. 

Şimşek said Turkey can put itself on a higher growth track for 6-7 percent through a number of structural reforms. 

Among a number of factors that would create risks over Turkey’s growth, he named geopolitical risks, a deceleration in the realization of structural reforms and a possible aggressive hike in the rates by the U.S. Federal Reserve. 

Şimşek said Turkey’s growth is mainly based on domestic demand, which has brought several problems, including high current account deficit and inflation rate. 

“Structural reforms will enable us to solve these problems,” he added. 

Şimşek also noted that the country’s target to slash its current account deficit below 4 percent of the GDP may face pressure amid problems in the tourism sector. 

“Our plan was to cut the current account gap below 4 percent of the GDP this year, but the tourism problems might limit the recovery in the field,” he noted. 

Turkey’s tourism revenue decreased by 16.5 percent in the first quarter of the year compared to the same period of 2015.