Turkey to prioritize lowering inflation, interest rates: PM

ANKARA

Turkey’s top priority will be both bringing down interest rates and double-digit inflation, Prime Minister Binali Yıldırım said on July 5, after consumer prices hit a 14-year high two days earlier.

Speaking to state-run Anadolu Agency, Yıldırım also said Turkey will continue to use the build-operate-transfer method in infrastructure projects, as well as foreign funding, due to budget constraints.

“Our main priority is to lower interest rates and to push down the inflation rate. We will take the required measures to achieve these goals,” said Yıldırım, whose post will be abolished when President Recep Tayyip Erdoğan is sworn in under a new system on July 9.

His remarks on tackling both interest rates and inflation at the same time go against conventional economic theory and he did not elaborate on how the government will achieve these two goals.

“We will also continue to make structural reforms. The public sector will keep making savings,” he added.

Yıldırım’s comments came two days after official data showed that Turkey’s consumer price index (CPI) climbed 15.4 percent in June from the same month in 2017 on an annual basis, up from 12.2 percent in May.

BOT model

He also said Turkey must continue its growth around “strong production, employment, and exports.”

“We will use the build-operate-transfer [BOT] model and external sources even more. We will spend the rest on social projects,” Yıldırım said.

He also claimed that from 1924 to 2002, Turkey grew 4.7 percent on average while between 2003 and 2017 there was average growth of 5.7 percent.

“If Turkey had grown 5.7 percent since 1925, by now it would have been the world’s seventh-largest economy with a GDP of $2.3 trillion,” he said.