Turkey needs balanced growth, says deputy PM

ISTANBUL - Anadolu Agency

Deputy Prime Minister Ali Babacan delivers a speech on the second and last day of the Istanbul Finance Summit, held in Istanbul’s Conrad Hotel. REUTERS Photo

Deputy Prime Minister Ali Babacan has said Turkey’s 2014 growth will “generally” be within its year-end targets, but warned the country needs to intensify its efforts to attain balanced growth.

Delivering a speech on the second day of the fifth Istanbul Finance Summit, Babacan predicted that Turkey would grow between 3 to 4 percent in 2014, slightly lower than the official target of 4 percent.

The government's economy tsar, however, added that there are still steps that need to be taken to maintain sustainable growth in the long-term.

“The picture is not bad, but there is a need for balanced growth. Turkey needs to make intensive efforts regarding this,” Babacan said.

According to Babacan, the government needs to continue with structural reforms in all areas in order to achieve sustainable and high-quality growth.

He also stressed that Turkey’s priorities in the coming period will be to reduce its current account deficit and inflation, which was 9.54 percent in August of this year. “Both indicators are high and need to be resolutely reduced,” he said.

Babacan also noted that despite challenges, Turkey’s expected growth rate of between 3 and 4 percent was still “well above that of some countries in Europe.”

“Turkey was Europe’s fastest-growing country last year and it probably will be again this year,” he said.

Babacan also said the U.S. Federal Reserve might exercise influence over developing economies with its monetary tightening, which is expected to be launched next year by increasing interest rates – a move he said the European Central Bank (ECB) might counter.

“In the coming period, we will see a more active European Central Bank in response to the very slow and volatile recovery in Europe,” Babacan said, stressing his hope that the ECB’s expansionist steps would balance the Fed’s money-tightening moves.