Turkish finance minister urges transparency, reforms

ISTANBUL

Finance Minister Mehmet Şimşek speaks during the 17th Eurasian Economy Summit in Istanbul. AA photo

Turkey needs more transparency and reforms to be able to reach the level it deserves, the country’s Finance Minister Mehmet Şimşek said Feb. 5 during a speech at the 17th Eurasian Economy Summit.

“This level does not suit Turkey,” the minister said in his speech. “We need more reforms to progress. We need transparency.”

Making a presentation that provided brief information on Turkey’s economic outlook, the minister said the country had three elections ahead and that there had been political developments that prompted questions about the prospect for political stability in the country.

Noting that a number of recently conducted surveys indicated that a “political outlook is not at stake,” Şimşek sought to assure that the government would enact political improve thanks to scores of reforms set to be implemented soon.

There is a possibility that foreign exchange tendencies could be reversed after the elections “which could reconsolidate trust in the government and political stability in the country.”

Turkey has been growing at an average rate of 5.1 percent annually, a figure that could be regarded as a moderate growth rate compared to countries such as China, but the numbers are actually impressive when viewed in light of Turkish economic history, Şimşek said. But he warned that the country could enter a period of modest growth, highlighting commodity price and market risks.

Şimşek said economic recovery in the European Union and the relative political stability achieved in Middle Eastern countries – aside from Syria – would likely have a positive impact on Turkey’s trade balances as these regions are Turkey’s top exports markets.

In his remarks, Şimşek also lauded the country’s success at keeping inflation down to single digits, “despite the ongoing upward risks, particularly stemming from measures taken by the government to reduce the current account deficit.”

The weak domestic demand and the Central Bank’s recent move to raise key interest rates will likely put pressure on growth, the minister said.

“The downside risks are increasing, but we didn’t revise the 4 percent growth forecast for 2014,” he said.

Şimşek also underlined financial discipline had made the country stronger against the shocks.

“Even if you achieve keeping the budget deficit low, the impact of higher interest rates could be kept at reasonable levels,” he said.