Turkish economy minister predicts stronger growth, measures to control food prices

Zeybekci said he saw no reason for the Central Bank to hike interest rates in the current environment, despite the weakness of the lira, which he said was 5-8 percent undervalued. But he also did not expect the Bank to cut rates at its next meeting.

Zeybekci said food inflation of around 14 percent was due to speculators and forecast that it would fall, saying that the government would take measures including the possible derestriction of imports on certain food products.

“It would be wrong to make any year-end predictions for inflation rates by looking at the current inflation rates, as these are not normal times. If you take today’s numbers, which are highly affected by speculative actions and pre-election concerns, you can find the inflation rates at around 6.3 or 6.8 percent. This is mathematically correct, but when you take the figures in May or June, you will find more accurate inflation rates for the year-end,” he said. 

Zeybekci said some measures will be taken to overcome the increase in the food prices, but there will be not any freeing in imports. 

“There were incredibly speculative moves in the dried bean prices in 2014. As soon as we made a decision with the Ministry of Agriculture to free imports of this product, the prices immediately slumped. We did not even start to import any dried beans,” he said.
 
Zeybekci added that some import licenses may be offered in some products by not making local producers uncomfortable. 

Speaking to Reuters in Ankara, Zeybekci said he expected Standard & Poor’s to keep its rating on Turkey unchanged at a review on May 8, but predicted that agencies would upgrade their ratings on Turkey after the June general election.