Reuters, ANKARA, September 7 - A day after the government raised its inflation estimates and lowered its economic growth expectation, Finance Minister Mehmet Simsek stated on Thursday that President Tayyip Erdogan fully supported Turkey's economic policy.
Erdogan has publicly criticized high rates for years, holding the unconventional belief that they exacerbate price pressures. However, he claimed on Wednesday that inflation will drop to single digits "with the support of tight monetary policy," which surprised some experts because it seemed to endorse recent aggressive interest rate hikes.
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At a media event, Simsek stated that he also planned investor meetings in Germany, the financial centers of New York and London, as well as in cities in Asia and the Middle East.
Analysts praised what they said was a more realistic attempt to address inflation that reached at 85% last year after Erdogan's policy U-turn began in June with Simsek's appointment, but they cautioned that the short-term economic pain could test his patience.
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Foreign investors strongly appreciate Simsek, who emphasized the president's support.
"Our president has full support, whether it be for the budgetary policies or the anti-inflation program. We not only see it, but we can also touch it, he informed the press.
He stated, in an apparent acknowledgment to skepticism in the financial markets about his ability to see through the policy change, "...There is not the slightest doubt."
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Turkey has had severe economic hardships, with its foreign exchange reserves being drained and the value of the currency falling recently. Since the May elections, it has lost another 25% of its value against the dollar.
STRESS REDUCE ACTIONS TO CONTINUE
According to the current official predictions, yearly inflation will increase to 65% by year's end before declining to 33% the next year, from 24.9% and 13.8%, respectively, in the predictions made a year ago. GDP growth was slowed to 4.4% this year and 4% the following year, yet it is still more t
