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4.4​ Fixed investment
Turkish President Recep Tayyip Erdogan on November 20 called on entrepreneurs to invest more in Turkey​, saying the country’s financial troubles are now fading away, Hurriyet Daily News reported.
“We are dispelling the dark clouds over our country by declining our inflation to single-digit figures and rapidly decreasing interest rates. Hopefully, 2020 will be a year in which interest rates will decrease even further,” Erdogan reportedly said.
The president made the remarks in a speech at a meeting with provincial heads of his ruling Justice and Development Party (AKP).
“I am calling out to enterprises. Come and invest [in Turkey]. I am calling on every industry. Regardless of the sector, come and invest [in Turkey]. The doors of our banks are now open to you, and the interest rates are clear as day,” he said.
Government officials are attempting to fuel the rebound from the recession that followed the summer 2018 balance of payments crisis by taking steps to pressure both state and private banks to further loosen the credit taps but some experts warn they risk inflating another phase of unwise lending, the like of which plunged Turkey’s economy into trouble in the first place. Added to that, there is evidence that Turks and Turkish companies are, despite the falling interest rates, wary of taking on new debts, thus endangering Erdogan’s plan to achieve 5% GDP growth in 2020.
However, Erdogan, in his speech, was determined to convey the belief that Turkey’s economic upswing was gaining sure momentum, adding: “The increase in property, automobile and domestic appliance sales, that had declined because of last year’s troubles, is an indicator of economic recovery.”
“I am calling on our investors: Don’t worry, don’t hesitate. Please, continue to invest in your own industries,” he added.
Before 2002, Turkey was only investing Turkish lira (TRY) 70bn ($12.3bn) annually while in 2019 its investment volume reached more than 1 trillion lira, Erdogan said.
He also once more distanced Turkey from the idea that at some point it could be forced to go back to the International Monetary Fund (IMF) for financial assistance, saying: “We do not have anything to do with the IMF; we are enough for each other. We solved all these problems with the motto ‘the state cannot be indebted to its nation’.”
The president criticised the main opposition Republican People’s Party (CHP) over a meeting it had with IMF officials in September. Top IMF officials met with representatives of the CHP and Iyi (Good) Party as part of its Article 4 consultation, an annual economic assessment of each of the Fund’s member countries. The meeting drew accusations from the government that it was a “secret meeting.”
“They [the CHP] were advising us to borrow loans from the IMF. You know they held a secret meeting with [IMF officials] and then said, ‘it’s okay to do so’,” Erdogan claimed.
The Turkey Wealth Fund (TVF) is to construct a $10bn, , around 20% of its total value, refinery and petrochemicals complex in Ceyhan, in Turkey's southeastern Adana province​, fund officials told state-run news service Anadolu Agency.
34​ TURKEY Country Report​ December 2019 ​ ​www.intellinews.com