Turkey's growth rate to pass 3 percent: Deputy PM

ANKARA - Anadolu Agency

Turkish Deputy Prime Minister Ali Babacan says the estimated growth rate was 4 percent before the local and regional incidents hadn’t happened. AA photo

Deputy Prime Minister Ali Babacan has said Turkey’s annual growth rate should be “over 3 percent” this year, despite the forecast being as high as 4 percent at the beginning of the year, speaking during a live interview on private broadcaster Kanal 24 yesterday.

“We still see a growth rate of more than 3 percent by the end of this year. [It has been affected by] the Gezi incidents, the foreign conjuncture, and regional developments in Syria and Egypt ... We had expected 4 percent growth at the beginning of the year but none of these things had happened at that point,” Babacan said.

If developments in Syria become a regional crisis, it will affect adversely oil imports from Gulf countries, or prices could rise when the oil supply falls. Babacan particularly stressed that developments in Syria had limited direct costs and effects on the economy, and that the government had to be careful about the indirect costs. Developments could also raise the defense budget, along with oil prices, he said, adding that this would only have a small impact.

He also said they should take into account the morale of the people and the markets. “We should pay attention to the effects of oil prices and feelings of safety, but we are working on them and watching,” he said.

Babacan also said they did not expect any downgrade in Turkey’s credit note, reminding that the credit rating agencies had previously stated that the global economic conjuncture or social mobility would not affect Turkey’s note.