Reforms vital for Turkey's growth: Deputy PM

By Tuba Sahin

ANKARA

Turkey needs to implement further economic reforms to set it on a path of continuing 5.5 percent-plus growth, according to Deputy Prime Minister Mehmet Simsek on Monday.

"Reforms not only support Turkey's growth performance through [improved] expectations but also raise the country's growth potential," Simsek, who is responsible for the country’s economy, told state broadcaster TRT.

"Turkey needs to implement more reforms in order to maintain its growth rate of 5.5-6.5 percent," he said.

Simsek’s comments came after the Turkish Statistical Institute (TurkStat) reported earlier in the day that the country had become the fastest-growing economy among G20 countries with an 11.1 percent growth in the third quarter of 2017.

The growth was triggered by domestic demand, including accelerated investment support by the government and strong contributions from exports.

"We expect both domestic and external demand to stay strong for the next year," Simsek said.

He predicted that this growth trend would continue in the coming years.

He added however that Turkey could not maintain this high growth through domestic demand alone but would need reforms.

'High, inclusive growth'

Simsek said the economy had grown 7.4 percent in the first nine months of the year.

"This growth is both high and inclusive. Industry is the essential driving force. Turkey showed a growth performance so strong that no one could have imagined it a year ago," he added.

All negative scenarios and analyses about Turkey in 2016 proved untrue, Simsek said.

The country's medium-term program, which was announced on Sept. 27, set a growth rate target of 5.5 percent for 2020.

Simsek also underlined the importance of controlling inflation, bringing it down to single digits.

Turkey can achieve consistently higher growth as long as there is macroeconomic and price stability, he said.

"I believe inflation will see a downward trend, especially in the first quarter of next year," he added.

According to TurkStat data, Turkey's annual inflation rate reached 12.98 percent in November.

The government’s medium-term forecast predicted a 5 percent inflation rate for 2020, down from 9.5 percent by the end of 2017.