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ECONOMICS > Euro crisis hitting world like WWII: Turkish Deputy PM

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The cost of the ongoing euro area crisis is at the same level with the World War II, or even surpassed it, says Turkey’s Deputy PM Ali Babacan. He warns over large debts of the developed countries

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Deputy Prime Minister Ali Babacan (L) speaks with Tunisian Prime Minister Hamadi Jebali at the sixth Turkish Sectoral Economy Council in Ankara.

Deputy Prime Minister Ali Babacan (L) speaks with Tunisian Prime Minister Hamadi Jebali at the sixth Turkish Sectoral Economy Council in Ankara.

The eurozone crisis cost compares with the financial consequences of the World War II for the globe, Deputy Prime Minister Ali Babacan has said.

“The debts of developed countries had not risen this much since World War II. The cost of the crisis is at the same level with the World War II, or even surpassed it,” Babacan said at the inauguration of the sixth Turkish Sectoral Economy Council in Ankara yesterday. “The growth rates of developing countries are also revised as decreasing, despite the fast growth after the 2009 crisis. It is anticipated to recover the rates after 2016.”

Babacan also said that the target for the period of 2013 to 2015 was to increase the growth rate to a new potential level, to battle inflation, to maintain the decrease in current accounts deficit, to raise the employment and domestic savings.

Turkey will rank first in growth rate among OECD countries in the 2011 to 2030 period, according to report of OECD and the country is expected to grow by average 4.5 percent,” said Babacan. The minister also said the government expected to decrease current accounts deficit to 6.5 percent of the gross domestic product in 2015.

“Even current account deficit rate reached 10 percent [of the GDP], the stability is continuing. The essential reason of deficit is dependence on energy import.”

The decrease in inflation will remain and it is anticipated to decrease to 5 to 6 percent by the end of 2012, Babacan said.

The minister also referred to the prime minister’s call on families for three children, by reminding that Turkey has risk of the decrease in young population after 2035. Speaking at the same event, TOBB chairman Rifat Hisarcıkloğlu said Turkey has already surpassed the pre-crisis levels in investments, production, employment and exports.

Meanwhile, Central Bank Governor Erdem Başçı announced the 2015 inflation target and growth estimation for 2013 during a press conference yesterday.

Inflation forecast: 5 pct

The Central Bank forecasted 2015 inflation target kept unchanged at 5 percent. As this year-end inflation target was forecasted as 5 percent too, the Bank aims to keep inflation around 5 percent for three more years to enable price stability. The inflation rate in 2012 will be announced next week. The Central Bank expects growth over 4 percent for 2013. “This year’s growth was export-led but we anticipate 2013’s growth to be both export and domestic demand-led,” Başçı said.

The Bank does not foresee holding daily foreign exchange buying and selling auctions in 2013, according to a note by BCG Partners Chief Economist Özgür Altuğ. “The ongoing export credits, which are some sort of buying auctions from the real sector, will continue in 2013;” he said in a note to investors yesterday.

December/26/2012

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