Reforms to continue without slowdown: Turkish deputy PM

By Muhammed Ali Gurtas

ANKARA

Necessary structural reforms will be strongly implemented in the medium-run by the government to back the recent actions taken for the economic growth, Turkey's deputy prime minister for the economy said Monday.

Speaking on a private TV channel to evaluate the results of Sunday's constitutional referendum, Mehmet Simsek said that the risk of undemocratic interventions would not be on the country's agenda anymore and that economic reforms would continue without any slowdown.

Simsek pointed out the accuracy of the government's recent actions like strengthening the Credit Guarantee Fund (KGF), employment support and new investment incentives.

"All those are factors that may accelerate Turkey with the elimination of referendum uncertainty and increase the country's hope. They have critical meanings in terms of managing the short-run process," he said.

"To back those for economic growth, the government will strongly implement necessary structural reforms in the medium-run," he added.

Early this year, the parliament approved a bill to provide a collateral of up to 250 billion liras (some $69 billion) to boost bank loans for businesses by covering non-performing loans at up to 7 percent of all loans -- an increase from the current 3 percent.

Around 157,000 companies have benefited from that guarantee and reached 114 billion Turkish liras [some $31 billion] finance through KGF, according to the country's ministry of finance.

According to the Turkish Statistical Institute, Turkey's GDP, which grew by 2.9 percent last year, was around 2.59 trillion Turkish liras (some $856.8 billion) in 2016, compared with 2.34 trillion Turkish liras (around $861.5 billion) the previous year.

- 'Price stability is a primary issue'

Detailing the fiscal policies in the post-referendum period, Simsek noted the price stability would never be a "secondary issue" for the government regarding its importance in terms of solid growth, development and higher real income.

"There is a slight increase in inflation, mainly related with the exchange rate fluctuations. So, we have taken those fiscal measures which were needed [to restrain that upward trend], the country's budget balance is satisfying considering the global standards," he said.

According to the Turkish Statistical Institute, Turkey's annual inflation rate rose 11.29 percent year-on-year in March from 10.13 percent in February.

Dollar/lira rate, which saw a historic hike -- around 3.94 liras -- in mid-January this year, hovered around 3.66 early Monday, following Sunday's referendum results. The U.S. dollar/Turkish lira exchange rate was 3.02 on average last year while one dollar was traded for 2.71 liras in 2015.

"Turkey's public debt to national income ratio is almost half of the average levels of developing countries. In this difficult period, moving an existing fiscal space and supporting the economy is the right approach," Simsek said.

The Turkish government ran a budget deficit of 14.9 billion liras ($3.7 billion) in the first quarter this year while there was a 29.3-billion Turkish lira ($7.81 billion) budget deficit in 2016, according to the finance ministry.

- ‘Turkey is definitely the winner of constitutional referendum’

Turkey's Deputy PM said: "From now on, the risk of a governmental crisis is very low since the two-headed problem has been eliminated. A notable majority of our nation has given green light for the constitutional change."

"It was not a parliamentary or municipal election. Sunday’s referendum asked voters to approve a switch from a parliamentary to a presidential system," he said.

"The result is obvious. Yes votes are almost 1.4 million ahead. Turkey is definitely the winner of constitutional referendum along with our nation and democracy."

According to the electoral board, as of 10.50 a.m. local time (0750GMT), unofficial results showed 25,156,860 voted Yes, while 23,777,014, or 48.59 percent voted No. The turnout was 85.46 percent.

Recalling the results of democratic votes across the world in recent years, Simsek noted that the United Kingdom's referendum held last year also resulted in a similar way.

In June 2016, Britain voted to end its 43-year association with the European Union (EU) and in a narrow outcome -- 51.9 percent chose to leave the EU while 48.1 percent opted to stay in the bloc.

Deputy PM Simsek stressed that a snap election is not on the government's agenda, as Turkey's President Erdogan has stated the general elections would be held in 2019.