Speeches

6/14/2018

Disclosures Made by Deputy Prime Minister Mehmet Şimşek on the Economy

“There are certain ongoing drawbacks; there is no country without problems, we will focus on the current account deficit and the inflation rate and will reduce the percentages. There has been considerable recovery in tourism. The recovery in the income levels of neighboring countries in particular in line with an increase in oil prices has made significant contribution both to the contracting sector and the tourism sector in Turkey besides exports”…

Deputy Prime Minister Responsible for the Economy Mehmet Şimşek made disclosures on the economy. Şimşek making the statement “Uncertainties will disappear after the elections” spoke as follows: “There are certain ongoing drawbacks; there is no country without problems, we will focus on the current account deficit and the inflation rate and will reduce the percentages.” Şimşek said that foreign debts are not as high as speculated.

“Expectations for interest rate hikes will be relatively stronger from now on”

Şimşek commenting on the decision to increase interest rates by the Fed, said that this has not been a surprise and the markets have already priced the decision. Şimşek pointing out that the wording that “monetary conditions have been supportive” has been omitted in the disclosure made by Fed which was being phrased since long, said that expectations for interest rate hikes will be relatively stronger on the road map from now on.

“The outflow from developing countries was the highest in May”

Şimşek reminding that the outflow from developing countries was the highest in May since November 2016, said “This also explains the fluctuation in our markets as well. There were allegations in the past that the monetary policy in Turkey was not clear enough and could not respond in a strong manner; now this argument is over. Let us face the truth; the Central Bank has acted in a strong manner as should be, continued to do so and will do whatever is necessary. We fully support the Central Bank in this sense.”

Şimşek stating that there has been an income flow in the short run both due to the zoning reconciliation and tax re-structuring within the scope of fiscal policies, said that they had formerly implemented measures to avoid a serious deterioration in the public finance upon taking steps to generalize taxing to a wider scale and by means of expenditure controlling. Şimşek pointing out that the factor which hinders the perception of Turkey in terms of inflow of funds and direct investments has been the state of emergency, spoke as follows:

“Our President of the Republic has clearly stated that our first job will be to lift the state of emergency. This will positively change the perception of Turkey from abroad and the point of view regarding the country.” Şimşek made the following statement in relation with the effects of lifting the state of emergency to the economy: “There was a serious gap between what Turkey really is and the perception. It will be a significant step to close the gap between the perception and reality.”

“Recovery in tourism”

Şimşek also pointing out that there is a certain recovery in tourism, said that the demand from abroad is also quite strong. Şimşek underlining that there has been a recovery in the income levels of neighboring countries in particular in line with an increase in oil prices, said that this is of importance both for the contracting sector and the tourism sector in Turkey besides exports.

Şimşek made a final statement as follows: “We are decreasing the number of Ministries and will initiate savings in public expenses”. Şimşek continued as follows: “We expect to yield an income of TL 48 billion from the reconciliation act for zoning and development in a period of 1 or 2 years.”