Turkish economy on right track, monetary policy fully functional, Finance Minister Simsek says / REUTERS

Must read

Turkey’s monetary policy is fully functional and the policy mix going forward will be more supportive, but more time is needed to see its effects and convince society at large, Finance Minister Mehmet Simsek said on Thursday.

Reuters, April 19, 2024, by Rodrigo Campos and Huseyin Hayatsever

« We’re doing all the right things, we’re on the right track, but we need time to show results, to convince the broader society, » Simsek said at an event on the sidelines of the International Monetary Fund/World Bank spring meetings in Washington.

Simsek said part of the structural transformation of Turkey’s economy goes along with a new industrial policy, which he said will be « pretty transparent and rules-based. »

« We want to channel resources to more productive areas, to reduce our carbon footprint, to make the economy more competitive, but also to see how we can enhance growth potential to higher productivity, » Simsek said, adding that the green transition is not a choice, but a necessity.

« When it comes to economic complexity, we know where we stand in the value chain. We’re not where we would like to be, and that’s why the reform comes in. »

In what could be a boost for manufacturing and trade, he said, « Turkey is one of the best candidates in terms of friend-shoring and nearshoring, which is the new norm post-pandemic and with all these geopolitical tensions and geostrategic competition. »

He insisted that tackling inflation remains the top priority, as are enhancing competitiveness, boosting productivity, and improving the investment climate.

Data earlier this month showed annualized inflation climbed to 68.5% in March, yet central bank Governor Fatih Karahan said it is on track to reach the 36% target by the end of the year.

« We need to tighten the fiscal stance to provide more support to (the) central bank, to bring inflation down at a time when inflation was de-anchored, where pricing behaviors were pretty … unruly, » Simsek said on Thursday.

The minister added that the sharp decline in the cost of insurance against a sovereign default, alongside positive comments from rating agencies, are evidence that investors have regained confidence in the Turkish economy and markets.

More articles

Latest article