Simsek: Better policy mix and reforms will help secure soft landing for Turkey

Simsek: Better policy mix and reforms will help secure soft landing for Turkey
Simsek has countered warnings that Turkey is in for a hard landing.
By bne IntelliNews June 12, 2018

Turkey's strengthening fiscal and monetary policy mix and reforms should help secure a soft landing for its economy, Deputy Prime Minister Mehmet Simsek said on June 12.

Ex-Wall Street banker Simsek, known as the ‘market friendly’ minister who leads the government’s economic team, made the comments on Twitter. He also said the government has full confidence in the central bank's management and is ready to support its disinflation efforts.

On June 11, analysts predicted an abrupt landing for Turkey’s economy, which they feel is overheating with double-digit inflation and a surging current account deficit, and increasing worries over debt repayment stress among Turkish companies.

With parliamentary and presidential snap elections due on June 24, the announcement of 7.4% GDP growth in the first quarter came as good news for the ruling Justice & Development Party (AKP( and Turkish President Recep Tayyip Erdogan, but the opposition is warning voters that the second half of the year will bring a lot of economic pain.

Despite the central bank’s attempts to get ahead of the monetary curve with two interest rate hikes since May 23, the Turkish lira (TRY), down more than 15% against the dollar in the year to date, was over June 12-13 sliding again. By around 13:05 local time on June 13, it stood at 4.6660. In early trading on June 12 it was at 4.52 levels. External factors including looming Fed and European Central Bank meetings as well as the coming Bayram/Eid holidays which will dry up liquidity were partly responsible, analysts said.

Related Articles

Turkish footwear manufacturers step up investments in Uzbekistan’s leather and footwear industries

Turkish footwear manufacturers are stepping up their investments in Uzbekistan’s leather and footwear industries, according to local reports. A $1mn investment in the manufacture of leather, ... more

Shipping companies latest to feel effects of “West’s very tight blockade against Turkey’s banking system", says report

Shipping companies are the latest to feel the effects of “the West’s very tight blockade against the Turkish banking system”, according to a report by Turkish publication Ekonomim. In ... more

“Panic buys” push up white goods sales in Turkey as consumers fret over impending credit card curbs

White goods sales in Turkey moved up 22% y/y in January as anxious consumers rushed to stores to make “panic buys” ahead of possible government measures to curb credit card spending, according to ... more

Dismiss