Turkey may go out of top 20 club: CHP

ISTANBUL

Kemal Kılıçdaroğlu gestures during a meeting with the economy journalists. Daily News Photo / Emrah Gürel

Turkey will fail to achieve its long-term growth targets as the government is incapable of developing the necessary economic policy, Kemal Kılıçdaroğlu, the leader of the main opposition Republican People’s Party (CHP) has said.

“This government is incapable of developing the policy to lift Turkey into the top 10 economies in the world by 2023. On the contrary, the country may fall outside of the top 20 economies. Turkey was the 14th largest economy [in the world] in 1987. Now it is the 17th,” he said yesterday at a meeting organized by the Economy Journalists Association (EGD).

The government has set an ambitious target to become one of the largest 10 economies and reach $500 billion in exports volume by 2023, the centennial of the foundation of the republic.

Crucial targets missed

However, Kılıçdaroğlu said the Turkish economy was off-track and was missing crucial targets in the government’s much-praised medium-term program. “The government makes a three-year program, however, all the targets are missed,” he said.

CHP Vice President Faik Öztrak, who also made a presentation at the event, said the government had revised down its own targets in the medium-term program regarding the main macroeconomic indicators including gross domestic product growth, and year-end consumer inflation for this year and the following two years. The government has revised its growth target for 2012 from 4 percent down to 3.2 percent and year-end inflation from 5.2 percent up to 7.4 percent.

The failure to meet macroeconomic targets has lost the government substantial credibility, according to Öztrak.

Noting that domestic demand had contracted sharply, he said the target for demand growth in 2012 was 4.1 percent, but it had plunged to -0.1 percent. Turkey’s economic growth is predominantly based on external resources and debt, he said.

Another soft spot in the Turkish economy, according to Öztrak, is the household debt level, which has shot up 36-fold since 2002, while household financial assets merely increased threefold in the same period.

“There is no soft landing in the economy [as suggested by the government],” he said.

Given the adverse economic data, Kılıçdaroğlu chided the local media for portraying the economic conditions without capturing the true economic situation of the country. “It is the duty of the media to write the truth,” he said, adding that the actual unemployment rate was higher than the official disclosure.

“Millions of people are jobless. The government claims to have decreased unemployment through tweaks in statistics. Someone who works for only 15 days is also counted as employed [for the full year],” he said.