Turkey now more resilient to internal, external shocks, finance minister says

Published 24.01.2020 19:30
Treasury and Finance Minister Berat Albayrak speaks to reporters, Istanbul, Jan. 20, 2020. AA Photo
Treasury and Finance Minister Berat Albayrak speaks to reporters, Istanbul, Jan. 20, 2020. (AA Photo)

The worst is behind for the Turkish economy and its financial system, said Treasury and Finance Minister Berat Albayrak, stressing that Turkey is now more resilient to internal and external shocks.

Albayrak's remarks came in his interview with Japanese Nikkei newspapers Friday.

The minister emphasized that the Turkish economy's immune system has entered a phase in which it is getting stronger.

After a financially and economically turbulent period that kicked off in the second half of the year in 2018 and prolonged into the first half of 2019, the Turkish economy had been battered by currency volatility, high inflation and high-interest rates, resulting in tumbling domestic demand by consumers and investors.

Turkey's GDP entered a promising era of growth in the third quarter of 2019, breaking three consecutive quarters of contraction. The economy grew 0.9% year-on-year between July and September of 2019, according to data of the Turkish Statistical Institute (TurkStat).

Compared with the second quarter, the Turkish economy expanded by a seasonally and calendar-adjusted 0.4%, its third positive quarter-on-quarter in a row, TurkStat data showed.

In the first two quarters, the economy contracted 2.3% and 1.6%, respectively, on an annual basis. In 2018, the economy posted an annual growth rate of 2.8%, narrowing in the last quarter.

The common market expectation for the fourth quarter estimates ranges from 4.5% to 5%. While the government forecasts 0.5% annual growth for the whole of 2019, its New Economic Program (NEP) targets a 5% annual growth rate for 2020, 2021 and 2022.

Albayrak said he is expecting roughly 0.5% GDP growth for 2019 with a possible 5% expansion in the last quarter of 2019. He also emphasized that 4% to 5% annual base growth for Turkey is only natural, considering high population growth and an export-oriented competitive industrial base.

Trust in Turkish Assets Yield Profits

In a post on his Twitter account Friday, Albayrak said those who had trust in Turkish lira assets since August 2018 to date have won.

He elaborated on the comparative returns of financial investment instruments from August 2018 to date and in 2019 alone.

Albayrak said the long-term Government Domestic Debt Securities (DİBS) investor has reaped the greatest profit with 101.5%, while BIST 100 index, the benchmark index of Turkey's stock exchange Borsa Istanbul (BIST), provided a value of 33.3% from August 2018 to date.

According to the infographic in Albayrak's post, the U.S. dollar and euro lost 9.8% and 13.7% in value, respectively, against the Turkish lira in the said period, in which the medium-term DİBS also provided a return of 68.3% to its investor.

In 2019, long and medium-term DİBS investors obtained 39.1% and 34% in profits, respectively. The BIST 100 index gained 29.7% in value last year.

Share on Facebook Share on Twitter