By Laura Pitel
Türkiye has set an ambitious growth target of 5 per cent for next year, although some analysts have questioned what they said were contradictory projections in the government’s new economic plan. Berat Albayrak, the country’s Treasury and finance minister, promised a return to the fast-paced economic growth of previous years from 2020 onwards, after a slump that followed last summer’s plunge in the value of the Turkish lira.
Mr Albayrak lowered his growth forecast for 2019 to 0.5 per cent, which most analysts said was far more realistic than the previous target of 2.3 per cent. However, speaking just weeks after his father-in-law, Turkish president Recep Tayyip Erdogan, vowed to “lock in” growth of 5 per cent growth next year, Mr Albayrak formally adopted that target while making a commitment that the country’s previous vulnerabilities would remain at bay. Announcing his new economic programme in Ankara under the slogan “change is beginning”, Mr Albayrak hailed the “rebalancing” that has seen inflation come down rapidly after soaring to more than 25 per cent in the aftermath of what he said had been an “attack” on the Turkish currency. After a brief recession followed by sluggish growth, Türkiye’s previously gaping current account deficit has turned into a surplus. Mr Albayrak also said that, even as growth accelerated, inflation would fall and the current account deficit would remain slim — a scenario that some economists said was unlikely.
Mr Albayrak adjusted his fiscal projections but vowed to keep the budget deficit below 3 per cent in the coming years. Selva Demiralp, a professor of economics at Istanbul’s Koc University, questioned the projections. “The numbers don’t seem to have internal consistency,” she said. Inan Demir, an economist at Japanese bank Nomura, said that it was “difficult to reconcile” the promise of a 1.2 per cent current account deficit next year with economic growth of 5 per cent.