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Turkish Finance Minister: Confidence of market actors in the Turkish economy has increased

Treasury and Finance Minister Nureddin Nebati stated that the returns of foreign investors and market actors regarding the Turkish economy were quite positive during the meetings held in London. Minister Nebati said that the market actors’ knowing the path and steps that Turkey will follow with determination increases the confidence in the Turkish economy.

Treasury and Finance Minister Nureddin Nebati answered the questions of Anadolu Agency (AA) reporter after the meetings he held yesterday with the senior executives and investors of international financial companies in London, the capital of England.

MEETS WITH CLOSE TO 40 SENIOR EXECUTIVES

Stating that he has held meetings with both domestic and foreign market actors since the first day he took office, Nebati said that they held meetings with nearly 40 senior executives, including 15 asset management companies, 15 international development and investment banks, and 4 private equity and infrastructure funds, in just one day in London.

Recalling that they traveled to London to meet with investors at the beginning of last month, and that they made their second visit yesterday, Nebati said: “The fact that the market actors knew about our determination, the path and steps to follow increased the confidence in the Turkish economy.”

Pointing out that the biggest problem the whole world has faced in the last two years is increasing inflation, Nebati said, “We have taken and will continue to take a series of steps to reduce inflation. We have full confidence that the confidence in the Turkish economy will increase with the improvement of macroeconomic indicators.”

“COMMODATE PRICES INCREASES INFLATION PRESSURE ALL OVER THE WORLD”

Minister Nabati stated the following regarding the possibility of the spread of geopolitical and financial risks originating from Russia-Ukraine to other countries:

“The Russia-Ukraine war and the comprehensive sanctions imposed on Russia in this context, negatively affect other countries through different channels, especially the Russian economy. Although Russia and Ukraine have a high weight in global agriculture, energy and other commodity exports, we see that their weight in global trade and growth is relatively low. While recent studies show that the Russia-Ukraine war has a spillover effect on the Eurozone and the global economy, this effect is expected to remain limited. On the other hand, especially rising commodity prices increase the pressure on inflation, which is already high all over the world. The increase in energy prices affects consumption negatively by reducing the purchasing power of households all over the world. The environment of uncertainty created by decreasing demand reduces investments. In this context, global inflation forecasts have been updated upwards, while growth forecasts have been revised downwards recently.”

“OUR COUNTRY IS EXTREMELY RESISTANT TO SHOCKS”

Nureddin Nebati also gave information about Turkey’s preparations for current global risks and said, “Thanks to the policy steps we have taken, we have reduced the vulnerabilities in our economy. Our country is extremely resistant to shocks with its strong public finances and robust banking sector.”

Drawing attention to Turkey’s strong fiscal discipline, Nebati said that they have a solid and prudent public finances in an environment where budget deficits are in double digits and indebtedness levels are in triple digits.

Nebati said, “Thanks to our EU-defined debt stock being well below the Maastricht Criteria, as well as its cost advantage and the ability to produce with added value, our country is a country that can manage its risks, has sustainable indebtedness rates, and is equipped with the necessary equipment in the face of unpredictable risks such as health crisis. With the awareness of its strong characteristics, Turkey takes inclusive steps against possible vulnerabilities that may be experienced in terms of possible risks.”

“STRONG EXPORT TREND CONTINUES IN 2022”

Treasury and Finance Minister Nureddin Nebati explained that they discussed the possible repercussions of the developments between Russia and Ukraine in every aspect at the Price Stability Committee, Financial Stability Committee and Economic Coordination Board meetings.

Emphasizing that they closely follow the developments in coordination with all relevant ministries and institutions, Nebati said, “In this context, we continue to resolutely implement measures to reduce the possible negative effects of risks originating from Russia-Ukraine on our economy. We have achieved significant gains with our policies that prioritize exports and value-added production. We see that exports, which followed a strong course last year, continue this trend in 2022 as well.”

Nebati stated that they have recently decided to apply VAT reductions in food and electricity in order to limit the negative impact of increases in global energy and non-energy commodity prices on the purchasing power of households.

Reiterating that the Turkish economy is resilient, Nebati said, “Our country has achieved both product and market diversification in exports with its successful foreign trade policies for many years, and has the ability to survive this process without any damage, with its dynamic and shock-immune real sector.”

“WE SUPPORT A BALANCED GROWTH OUTLOOK WITH PRECAUTIVE PUBLIC FINANCE”

Minister Nebati said that the households in Turkey do not have any foreign currency debt, and the banking sector does not have a foreign exchange open position.

Stating that Turkey has a strong balance sheet structure and a growing banking sector, Nebati said, “Our country’s total debt ratio is also very manageable and at low levels. We support a balanced growth outlook with prudent public finances.”

Pointing out that Turkey has increased its resistance against negative shocks every year, Nebati said, “Although there has been a slight upward trend with the increase in energy imports in the recent period, I see the significant decrease in our current account deficit compared to previous years and the decrease in our dependence on foreign savings as an important supporting factor.”

Sharing his views on what can be done to make Turkey more attractive for companies that want to leave Russia, Nebati concluded his speech as follows:

“We continue our determined efforts to support investor confidence in order to increase the competitiveness of the Turkish economy in the international arena. In this context, focusing on reforms in the fields of education, skills and workforce to strengthen human capital, taking steps to integrate companies into the global value chain, accelerating the digital transformation in the industry, focusing on policies to increase productivity with value-added and innovative production will be our top priorities in the upcoming period. With the Turkish Economy Model, we aim to increase production, exports and employment by ensuring macroeconomic stability and encouraging high value-added investments. Thus, we aim to permanently solve the current account deficit problem, overcome the middle-income trap and rise to the top of global value chains.”

Source: NTV / Translated by Irem Yildiz

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