Turkey may revise economic targets once government is formed: Minister

ANKARA/ISTANBUL - Reuters

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Turkey may need to revise its economic targets downward once a government is formed, Turkish Finance Minister Mehmet Şimşek said on July 27, on the back of persistent uncertainties.

“We hadn’t been expecting uncertainty in the second half of the year like the first half,” Şimşek said in an interview broadcast live by NTV Television. 

“A downward revision may be necessary [once] a government is formed,” he said. 

Şimşek said his party, the Justice and Development Party (AKP), will try to form a government in a constructive way, but all will see the country is resistant to short-term shocks if any government is not established.

He noted some slowdown in the economy is expected in the second half of the year and this is actually normal in election years. 

“We, however, expect the parliament will work to realize several structural reforms in the second half of the year. This did not happen… If the talks between the political parties yield a result and a new government is formed, some downward revisions may be required in macro targets, but they will be modest,” he said. 

If a new government is not formed and an early election tops the agenda, the downward risks become harsher, according to Şimşek. 

“If the uncertainties continue in the second half of the year, the downward risks regarding the 2015 growth will become stronger,” he said. 

Şimşek said the rapid improvement in Turkey’s current account deficit has recently slowed down due to the loss in the euro’s value, current problems in the Middle East and the indirect impact of these problems over oil prices. 

“The figure is still better than the 2013 figures. To be able to sustain the improvement in the current account gap, we need to ensure political stability, fiscal discipline and reforms,” he said.