Turkey aims for ‘sustainable’ growth model: Minister

ANKARA

A growth model would not be sustainable if not based on efficiency development, Treasury and Finance Minister Lütfi Elvan said in a parliament commission meeting on Nov. 12.

The Turkish economy recorded a growth rate of 14.3 percent in the first half of this year with support from domestic investments and net foreign demand, he told lawmakers at the planning and budget commission meeting.

“A growth model not supported by efficiency achievements is not a sustainable growth model,” he added.
The volume of economic supports for households against the fallout from the coronavirus pandemic will reach 734 billion liras ($75.3 billion) at the end of the year, he said.

“In our fight against inflation, we have waived 125 billion liras in public revenues with tax breaks and price adjustments. We have shown our determination in fiscal policy very clearly. Supports for natural gas and electricity bills are not included in the figure I have mentioned,” said Elvan.

Denying claims that the Turkish government prefers the Turkish Lira to be cheaper against foreign currencies to ramp up exports, Elvan underlined that Turkey has introduced a floating exchange rate regime, in which the value of the lira is determined in the open market.

He also said that the international business conditions and the high inflation rate in Turkey requires “cautiousness.”

The headline inflation rate in Turkey hit 19.89 in October, according to the Turkish Statistical Institute. The Turkish Central Bank will decide on its benchmark interest rate, which it cut to 16 percent from 18 percent last month, on Nov. 18.

The lira/dollar exchange rate rose 0.8 percent to a new high of 9.98, just short of the 10-dollar psychological mark on Nov. 12.

The Turkish economy is expected to grow around 9 percent this year, according to international organizations.
But it is more important that growth should contribute to employment and income distribution fairness, the minister said.

Despite the high growth rate, the current account balance gap’s ratio to the gross domestic product (GDP) will be below 2 percent in 2021, he said, in contrast with recent years.