Turkish authorities are rolling out a credit volume of TL 120 billion (around $2.7 billion) to shield its tourism and exports sectors amid global tensions, according to a report on Saturday.
The Treasury and Finance Ministry is introducing this volume under the credit guarantee system for sectors engaged in tourism and exports to minimize the impact of geopolitical and regional developments, a report by Anadolu Agency (AA) said.
The ministry is implementing the credit guarantee system in line with the financial stability objectives of its economic program, according to information obtained by AA.
While working on a new package and the limit updates related to the credit guarantee system, the ministry aims to ensure uninterrupted access to financing for the real sector.
Now, the ministry will take another strategic step under the Treasury-backed guarantee system to minimize the effects of the global outlook and regional risks on economic activity.
Within the framework of the investment, employment, and export-oriented growth strategy outlined in the economic program, the ministry will inject an additional TL 120 billion in credit into the economy.
This step will be taken to update the packages of the Export Development Inc. (IGE) and Participation Finance Guarantee Inc. (KFK), whose limits have been reached due to strong demand.
Thus, the aim is to take precautions against the potential indirect effects of geopolitical tensions in the region on tourism, Türkiye’s most important foreign currency-earning service sector.
Through the Tourism Support Package, a credit facility of TL 60 billion has been created to help tourism businesses maintain operational efficiency. This resource is intended to help the sector withstand pressure from regional volatility in advance.
Under the Export Breakthrough Support Package, a credit facility of TL 30 billion has been allocated for exporters via IGE. An additional TL 12 billion will be made available to exporters through KFK.
Moreover, an additional limit of TL 18 billion has been defined for the existing support package carried out through KFK. With this limit, it is envisaged that businesses will gain fast and cost-effective access to the working capital they need in the face of rising costs.
Treasury and Finance Minister Mehmet Şimşek stated that these packages were designed in full coordination with the disinflation process and the selective credit policy.
"The additional volume will be directed toward ‘targeted’ areas that directly enhance production, foreign currency-earning activities, and economic resilience," he said.
"To limit potential deterioration in the external balance due to geopolitical developments, we are providing strong support to tourism, the leading sector in service exports. With these packages, we aim to prevent possible tightening in access to financing and to preserve the working capital cycle of the real sector," he added.
"In this way, while strengthening the financial resilience of the real sector, we also ensure the sustainability of growth without compromising macroeconomic stability targets."
"Our efforts to limit the potential impact of the war in our region on our current account balance will continue," Vice President Cevdet Yılmaz separately said in a social media post.
Investor-directed measures
Also, a report on Sunday suggested that Ankara has begun work to provide incentives and attract foreign capital amid ongoing regional crisis.
Among measures reported by AA, Türkiye is said to be working to reduce the corporate tax rate, especially for manufacturers and exporters, while also the introduction of a special taxation regime that encourages foreign individuals to come to Türkiye is reportedly on the agenda.
Moreover, studies are being carried out extensively on the advantages to be provided to qualified investors who will choose Türkiye.
The relevant ministries are also expected to carry out studies on residence permits, work permits and digital visas in order to facilitate the arrival of these investors to the country, it added.