Gov’t spends too much, says main opposition

ISTANBUL - Hürriyet Daily News

The opposition CHP has slammed recent comments by Deputy Minister Babacan. AA Photo

Turkey’s main opposition party slammed recent comments by Ali Babacan, deputy prime minister and head of the Economy Coordination Board, on the country’s savings ratio, complaining it was too low.

The contribution of public consumption spending on growth was higher in the third quarter, showing the government preferred to hike its spending despite Babacan’s complaints about it, according to the recent economic outlook report by the Republican People’s Party (CHP).

Turkish gross domestic product increased 9.6 percent in the first nine months of the year compared to the same period in 2010, the report said.

The International Monetary Fund (IMF) revised its Turkish GDP forecast downward from 2.2 percent in September to 2 percent in December, while the Turkish government predicts a moderate slowdown to 4 percent annual growth next year.

Meanwhile, the risk of a hard landing for the Turkish economy is increasing, according to the CHP.
The country’s third quarter growth data suggests economy policies are ineffective at slowing down the growth at a targeted pace, the report said.

Growth figures, which are over market expectations, and last quarter capacity utilization rate and manufacturing data, bolsters expectations this course will drag on, the report said.

“The Turkish economy will grow more than 8 percent even if the last quarter growth rate comes down to 4 percent,” the report said.