President Recep Tayyip Erdoğan on Thursday announced that Turkey would provide cheaper loans for export and tourism sector investments that earn foreign revenues.
Addressing a gathering of small business owners in the capital Ankara, Erdoğan said that export-related loans would have rates as low as 9%. Funding of TL 100 billion ($6.8 billion) would be freed up for exporters and TL 50 billion for the tourism sector.
The industry welcomed the announcement, saying it would make a positive contribution at such a challenging time.
“If we want to bring Turkey to a good point, if we want to increase exports, financing costs had to be reduced,” said Mustafa Gültepe, head of the Istanbul Apparel Exporters’ Association (IHKIB).
“This incentive will have a very positive impact on investment,” Gültepe told private broadcaster Bloomberg HT. He added that making such incentives long-term and continuous will be positive for all companies that want to invest and will definitely make a positive contribution to the investment.
For his part, Dalaman, Ortaca and Köyceğiz Tourist Hoteliers and Tourism Business Association (DOKTOB) Head Yücel Okutur stressed the importance of the package that comes just as the tourism season is entering a new season.
“I find the loan support very positive, it will provide a serious and important opening,” Okutur said.
Erdoğan has supported monetary easing to boost credit and exports and to reverse current account deficits.
In September, the Turkish central bank embarked on an easing cycle, which saw its policy rate being slashed by 5 percentage points to 14%.
The easing had come as the government endorsed a new economic program that prioritizes low borrowing costs, a current account surplus, growth, exports, credit and employment.
Erdoğan pointed to the recent price developments, saying “exorbitant” price rises were due mostly to energy and commodity markets and currency instability.
He reiterated that those who unfairly raise prices would be punished.
Led by energy costs and food prices, Turkey’s annual inflation rose to 61.14% in March, a new 20-year high.