Turkey expects V-shaped economic recovery from virus

ANKARA

Turkey is anticipated to come out of the coronavirus-driven crisis with a V-shaped recovery, and will converge its potential growth, the country's treasury and finance minister said on Tuesday.

Addressing the general assembly of the Banks Association of Turkey in Istanbul, Berat Albayrak said the government clearly observes the recovery in economic activity.

"Turkey's exports increased 24.6% in the first 21 days of June compared to the same period of last year," he said.

On the PMI figures in the European Union announced in the morning, he said this also reveals that the recovery in June continues strongly in Turkey's trading partners.

"These developments show that the recovery in exports has started," Albayrak stressed.

With the introduction of the deferred demand, improvement in expectations, and measures taken by stimulus packages, Turkey will get closer to its potential growth, he added.

A V-shaped recovery is characterized by a quick and sustained recovery with measures to regain economic performance after a sharp economic decline.

Albayrak also said employment package that the government is working on will continue to strongly reset the economic recovery process in the coming period.

Banking sector has healthy outlook

"The banking sector has a very healthy outlook with its strong capital structure, high asset quality and profitability rates," he said.

As of April, the industry's annual return on equity is around 11%, Albayrak said.

In the same period, the legal minimum with a capital adequacy ratio of banks is 18.6%, much above the 8% threshold, he said.

The minister also proposed that the banks revisit their old practices and refresh themselves to adapt to the changes in the post-virus era.

"We expect you [banks] to perform work more compatible with the development goals of our country," he stressed.

Albayrak also stated the government has gained a market surveillance capability that has not been seen in Turkey’s history.

"Our regulatory institutions have reached a level that will not hesitate to take any necessary precautions against every attempt that will threaten the financial and economic stability of our country," he concluded.