Economy expected to grow 4.5 pct this year: Şimşek

ISTANBUL

Despite all global financial problems, the Turkish economy is forecast to grow by 4.5 percent in 2023, Treasury and Finance Minister Mehmet Şimşek has said, vowing to continue to take measures for monetary tightening.

Steps taken on the monetary and fiscal policies coupled with reduced political uncertainty in the wake of the elections have started to positively affect expectations regarding the Turkish economy, Şimşek said in a speech he delivered at a meeting of the Turkish Banking Association (TBB) in Istanbul.

“Our policies will be in line with international norms. We are shaping our monetary, fiscal and credit policies in a way that will ensure that we meet our targets. We will continue to take steps toward the simplification and tightening of monetary policy,” the minister added.

The government’s short-term priority is to establish financial stability and increase predictability, he said.

Şimşek called on banks to help efforts to improve the current account balance and disinflation process.

“The era of banks only focusing on consumer loans should be a thing of the past. Our main task is to support the real sector. The real sector’s uninterrupted access to financing is a must.”

Strong domestic demand poses risks through the current account deficit and inflation, Şimşek said.

“We will further deepen financial markets. The need for establishing a rebalance in the economy is very clear.”

The Turkish economy grew by 4 percent in the first quarter of 2023 from a year ago, accelerating from the 3.5 percent rate of growth in the final quarter of 2022. The expansion in January-March from the previous quarter was 0.3 percent.