I met with some of the economy officials and the leading economists over the weekend to exchange ideas before the CBRT’s interest rate decision.
Since I’ve been getting many calls about this very issue since Sunday, I would like to share with you some insight on the matter discussed at this meeting. As the first person to speak up, I provided the participants with some suggestions about the investors’ perspective, the pillars of the new growth model and finally about the importance of structural reforms. Having had a turn to speak, one after the other, these esteemed experts and economists furnished absolutely spot-on analysis of the following issues:
- Making the improvement in current account deficit a permanent thing
- Measures to take to avoid exchange rate attacks
- Putting an end to discussions about CBRT Reserves
- Treasury’s foreign currency and TRY denominated borrowing strategy
- Direct communication and building trust
- Non-performing loans
- Latest status of energy deals
All these issues were tackled by an authorized official. According to my meeting minutes, it is envisaged to establish rational regulations on taxation over the next period and a positive year-end GDP growth rate. While the attendees gained some insight on monetary policy-related expectations, practices and possible outcomes, they have also pointed out that government took key remedial steps regarding agricultural products that contribute the most to the inflation.
“Better avoid a false agenda…”
The participants expressed their convictions that the government is taking rational steps about wage hikes as well, that Turkey should avoid too much caution, and not compromise budget discipline and; as for ratio of the current account balance to the Gross Domestic Product, 3 percent should be our red line, thus doing everything necessary to ensure 2020 will be a much better year than 2019. Obviously, we have all heard these good wishes before. However, it was important to notice that economy officials speak with conviction, making others see that they firmly believe what they are saying.
During the meeting, participants have also noted that the government will preserve its policies to pave the way for TRY-denominated floating rate loans while sparing no efforts to ensure that the private sector is provided with cheap money. Obviously, the reserve fund issue was on the meeting’s agenda too. “It’s pure treason not to use money that is on this country’s balance sheet”. I think these words perfectly reflect Ankara’s approach to the matter.
“Turkish economy administration talks less, does more”, they said. As a matter of fact, the economy officials in Turkey do their best to avoid political conflict. That is true. However, some words coming out of some officials’ mouth have their economic consequences as well. Things get worse and worse as they continue to set forth a false agenda. If we can manage to make this country a place where everyone minds their own business, economy officials too could breathe a sigh of relief at last.