Turkish Deputy PM confident about economy after coup attempt

Turkish Deputy PM confident about economy after coup attempt

Turkish Deputy PM confident about economy after coup attempt

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Turkey does not expect to experience difficulties about any rollover of its external debt, Deputy Prime Minister Mehmet Şimşek stated on July 21.

Speaking in a TV interview following the declaration of a state of emergency after the failed military coup on the night of July 15, Şimşek vowed that Turkey’s economic base is “solid,” adding that it has repeatedly surprised observers with its resilience during previous global economic crises and geopolitical rifts. 

“A significant part of this debt is related to finance of trade, which means being in debt to companies who sell goods to us on credit. Will they stop selling goods to us? This is important,” he said. 

Government to ‘prioritize reforms for savings’

“Secondly, there are financial institutions with which Turkish banks have had relations for a very long time. Will they quit relations all of a sudden?” he added. After Standard & Poor’s downgraded Turkey’s credit rating one notch – triggering fears of significant capital outflow – Şimşek admitted that credit costs may edge up due to credit rating agencies’ decisions.

The deputy prime minister said the government would “prioritize reforms aimed at increasing domestic savings, which means we will reduce dependence on external finance.”

President Recep Tayyip Erdoğan leveled harsh criticism against S&P late on July 20, describing the decision to lower Turkey’s rating as “political.”

Erdoğan vowed that such a decision would not harm Turkey. 

Considering the state of emergency declared on July 20, particularly regarding its possible effects on the economy and the lives of ordinary people, Şimşek vowed that the measures would only focus on those who took part in the failed coup attempt.        

He said the state of emergency was aimed at bringing all coup plotters “swiftly” to justice. 

“The lives of ordinary people and the economy will go on uninterrupted. It will be business as usual and emergency powers will not be abused,” Şimşek said.        

His comments came after Turkey announced on July 20 a nationwide three-month state of emergency after a failed coup which killed hundreds of people and injured more than 1,500 last week.