Turkey: Economy in rapid normalisation process as of July

Turkey has entered a rapid economic stabilisation period, a result of policies implemented during the Covid-19 pandemic, and almost $63 billion in aid was given by the government, the finance minister said. 

Minister of Treasury and Finance Berat Albayrak outlined the country's economic progress at an event in Istanbul on Tuesday where he launched the government’s New Economic Programme 2021-2023. 

The three-year economic road map is aimed at providing sustainable growth, reducing a budget deficit and decreasing the unemployment rate, all by 2023.

"We determined the main themes of the New Economic Programme as 'new balancing,' 'new normal' and 'new economy,'" said Albayrak.

Albayrak said the new programme will map out Turkey's route to combat financial and macroeconomic imbalances resulting from the pandemic. He said the roadmap will help Turkey adapt to the new normal.

The plan targets a 10.5 percent inflation rate for 2020 and aims to increase savings through strategic reforms in financial markets.

Labour market, liquidity and supply chains

Albayrak said many policy measures implemented during the Covid-19 pandemic allowed the country to enter a rapid economic stabilisation.

He said the country built its fight against the virus on three basic goals — to keep the labour market alive, to provide aid and liquidity to households and businesses affected by the pandemic and to keep supply chains alive by ensuring basic sectors continued working.

These measures have allowed the nation to maintain a strong balance sheet compared with many other countries grappling with the virus, Albayrak said.

Financial support to 9 million citizens

Some $62.9 billion in aid was given by the Turkish government during the pandemic, the finance minister said. 

Turkey also provided $34.24 billion of loan financing and $6.08 billion in aid to 9 million citizens, he added.

Albayrak emphasised financing was provided at a very low cost to all stakeholders, from households and tradesmen to industrialists and exporters.

Exports up by 27 percent

Albayrak drew attention to Turkey's exports which increased by up to 27 percent in the June-August period of 2020 compared to the March-April period.

Turkey found significant gas resources in the Black Sea last month, allowing the country to plan cutting its dependence on energy imports once the gas is commercially extracted.

The estimated reserve stands at 320 billion cubic metres of natural gas.

READ MORE: Turkey finds natural gas reserve of 320 billion cubic metres off Black Sea

Declining budget deficit 

The country expects the budget deficit to decline gradually. The new roadmap forecasts a budget deficit of 3.5 percent of the GDP by end of 2023.

“We expect the budget deficit to national income ratio to gradually decline over the period; from 4.9 percent this year, 4.3 percent in 2021, 3.9 percent in 2022 and eventually dropping to 3.5 percent in 2023,” Albayrak noted.

Turkey's unemployment rate is also expected to decrease to 10.9 percent by 2023, falling gradually to 13.8 percent this year and 12.9 percent next year.

"We expect growth to be positive throughout the year" said Albayrak.

Earlier on Tuesday, Turkish Statistical Institute, TurkStat, said Turkey's economic confidence index rose 3.1 percent to 88.5 in September.

READ MORE: Turkey's economy grows 4.5 percent in Q1