Turkish economy going through historical change: Erdoğan

Turkish economy going through historical change: Erdoğan

Turkish economy going through historical change: Erdoğan

The Turkish economy is going through a historical change and will surely be among the top 10 economies, President Recep Tayyip Erdoğan has said, urging private businesses to reduce the prices of goods in line with the drastic decrease of the foreign currencies over the recent days.

“We have launched a historical change on our economic policy. In fact, this change has not just begun, it has been in a process for a long time. First of all, we have abandoned the classical economic approach that aims to control inflation through interest rates,” Erdoğan told at a meeting with economists and academics in Istanbul on Dec. 24.

Instead of this, the government has preferred an economic policy that prioritizes growth based on the pillars of investment, production, exports and current account surplus, Erdoğan stated, citing recent currency turbulence as one of the risks of this major change.

The government was under the pressure from external and internal forces, even from the Justice and Development Party (AKP) officials, to avoid this risk by increasing the interest rates, the president recalled, saying, “We have insisted on implementing our own program without paying attention to these threats. We have observed that the artificial valuation of the currencies has been removed just in a day. This result has emerged not only because of the success of our economic policy but also of our determination.”

Erdoğan referred to a new set of measures aiming to curb the devaluation of the national currency against the U.S. dollar and other hard currencies. The measures include a compensation system for those who keep their deposits in the Turkish Lira.

The economy will enter a much better climate in the coming period as Turkey has risen as a manufacturing hub in its region during the pandemic, the president said, vowing this will help Turkey to become one of the top 10 economies in the world.

Erdoğan also informed that the current reserves of the Central Bank exceed $115 billion, and it will further increase in due course, underlining that the country’s top economic and fiscal figures depict a strong picture.

He also said Turkey has no contact with the International Monetary Fund (IMF) as it paid all of its debt to the monetary organization as of May 2013.

Erdoğan warns companies to fine-tune prices

In his statement, Erdoğan also warned private companies, markets and real estate agencies of serious consequences if they do not fine-tune their prices after the sharp decrease of the value of the U.S. dollar.

“There were those who made exorbitant price increases, unrelated to the real change in costs, using the rise in the exchange rate as an excuse. I would like to remind you, on behalf of the nation, that we will be followers of those who change price lists and price tags several times a day. No one has the right to exploit this nation,” he stated.

Otherwise, the Trade Ministry and the Treasury and Finance Ministry will take all the measures against those companies and use all their means against the stockpiles, he warned.

inflation rate, fx rates,