Growth target achievable, top advisor predicts

BURSA - Anatolia News Agency

Durmuş Yılmaz says the Turkish economy needs a soft landing to cut risks. DHA photo

The growth target for the Turkish economy this year, set at 4 percent by the government, is achievable, according to Durmuş Yılmaz, former Central Bank governor and chief economy advisor to President Abdullah Gül. He also said Europe was not going bankrupt and the euro was not falling apart.

“The 4 percent growth envisaged this year in the medium-term program is achievable,” said Yılmaz, speaking at a meeting organized by the Orhangazi Chamber of Commerce and Industry in Bursa, an industrialized province in western Turkey.

The real question was whether high growth is sustainable, said Yılmaz, referring to the gross national product growth of 9 percent in 2010 and 9.6 percent in the first nine months of 2011. Potential growth rate of Turkish economy this year may be 5-6 percent, according to Yılmaz.

The International Monetary Fund said in December that economic growth may plunge to 2 percent in 2012 due to weak capital inflows, while Economy Minister Ali Babacan stepped back from the ambitious growth target of 4 percent for 2012. The growth target could be revised downward if the European debt woes deteriorate further, he said Jan. 5.

The dynamics of Turkish growth are based on domestic demand, said Yılmaz. “Thus, to lessen the risks, such as current account deficit, this growth should slow down and especially some corrections are needed in the economy.”