Turkish Economy Struggles amid Slow Growth

Ankara-Turkey has been making tremendous efforts to restore its trade and economic relations with neighboring and regional countries to recover its economy’s momentum amid indications on slow growth that has affected tourism rates, the flow of foreign capitals, along with negative estimations made by global credit rating agencies following terrorist attacks that struck the country at the beginning of this year and the failed coup attempt in July.

Deputy Prime Minister Mehmet Simsek has provided negative indexes on expected growth rate in Turkey saying his country will not be able to fulfill its goal in reaching a growth rate of 4.5% this year amid increasing regression risks particularly during Q3 of 2016.

Simsek said that Turkey aims at supporting growth using economic motivation and fiscal exemption, noting that lack of savings puts the country’s economy in front of a deadlock while the government wants to increase saving rates. In the same context, Fitch Ratings has affirmed Turkey’s sovereign rating at BBB- and lowered its outlook to negative from stable in a review after last month’s developments.

In a statement, Fitch said that the failed coup attempt has increased risks on political stability, and added that political ambiguity is expected to influence the economic performance and to threaten the economic policy.

Lütfi Elvan, the minister of Development, saw that the Turkish government will make efforts to set a new motivating system that aims at attracting foreign investors and that will allocate a special backup mechanism to each project. He also pointed that foreign investors have been discussing projects they intend to implement with the Ministry of Economy and that they will certainly benefit from these special mechanisms.

Elvan has accused Gelen movement, which has been blamed for the failed coup attempt, of working on distorting the country’s image and economic reputation in the world. He has revealed that he plans to visit around 25 countries to fix this misperception on the Turkey’s local conditions.

As per restoration of economic relations with the neighboring countries, Deputy Prime Minister Noureddine Jankly said that the coming days will witness developments in economic ties between Syria and Turkey at the popular and official levels.

For his part, Customs and Trade Minister Bulent Tufenkci stated that his country is looking forward to improving its ties and to considering joint interests with Egypt other neighboring countries in line with international agreements and treaties. He also clarified that the government will take the needed steps in this context and called on Egypt to lift the imposed ban on Turkish commodities as a first step to improve economic relations between the two countries.

Energy and Natural Resources Minister Berat Albayrak declared that his country will revive its old relations with Russia and that his ministry works to resume all the hammered projects with Moscow mainly the Turkish Stream gas pipeline and the Akkuyu Nuclear Power Plant.

Russian ambassador to Ankara Andrey Karlov announced that trade exchange between Moscow and Ankara had declined by 43% within the five first months of 2016 after the suspension of the economic joint committee work. But he noted that the recent meeting between the Russian and Turkish presidents in Saint Petersburg has reactivated mechanisms of trade exchange and opened discussions on developing cooperation between the two countries.

Turkish Economy Struggles amid Slow Growth