Turkish economy strong enough to weather fluctuations, says minister

ANKARA

The Turkish economy has a strong structure to weather the effects of the fluctuations in the exchange rate level, Treasury and Finance Minister Berat Albayrak has said.

“The exchange rate goes down, it goes up. What is important is that Turkey manages all this volatility in a controlled way,” Albayrak said in an interview with private broadcaster CNN Türk on Aug. 12.

The Turkish Lira lost around 22 percent of its value against the U.S. dollar since the beginning of this year. The dollar/lira exchange rate hit an all-time high of around 7.37 on Aug. 7.

The Turkish economy is more resilient that it was two years ago, according to Albayrak.

He added that malicious perception operations do not work on Turkey anymore as the country switched to a “national independence (economy) model”.

Pointing to the rapid revival of the economy in May and June, Albayrak said Turkey will be among the least hit countries in the second quarter of this year due to the coronavirus pandemic.

“We will be one of the fastest normalized and recovered countries in the world,” he said.

In the first quarter of 2020, Turkey’s economy grew 4.5 percent on an annual basis, according to the latest data from the Turkish Statistical Institute (TÜİK).

TUİK will release growth data for the second quarter on Aug. 31.

The first COVID-19 case was confirmed late in the first quarter in Turkey.

All economic data shows Turkey’s economic recovery is off to a strong start with the lifting of restrictions.

“On contrary to international institutions’ forecasts which show a contraction of above 5 percent, we expect Turkish economy to grow between minus 2 percent and plus 1 percent this year, above the world average,” Albayrak said.

If the pandemic had not occurred, Turkey could meet its 5 percent growth target set for 2020 as well as its inflation and current account targets, but there will be some deviation from those targets, he added.

Albayrak said the lira will not have as negative an effect on inflation as expected but said the pandemic may have a 1-2 percentage point impact on inflation.

Annual inflation fell to 11.76 percent year-on-year in July, according to the latest official data. The government forecast for end-2020 inflation is 8.5 percent, while the latest central bank survey placed it at 10.22 percent.