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Getting the loan growth to a reasonable level is a key objective for Turkey, however, the country should not insist on limiting credit growth to 25 percent this year, given recent developments in the world markets, according to Finance Minister Mehmet Žimžek.
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“At this point, uncertainty will increase demand for credit. We are going through a period where insisting on an upper limit for the loan growth rate at 25 percent would not be advisable, at least for the time being,” Žimžek said Thursday, in a live interview on CNBC-e television.
Stressing that Turkey’s banking sector was robust compared to that of other countries regarding both profitability and capital adequacy, Žimžek said the sector held a balance sheet that could strongly support real economy.
Regarding the unease in the global economy, Žimžek said he expected a prolonged slow global growth in the coming years, rather than a second dip on global markets. The coming crisis might also be one of “slow growth, uneasy employment,” he said.
Turkey cannot avoid being affected by the crisis in the short term, due to the economy’s integration into world markets. “It will be natural for investors to be affected to some extent. We are already currently going through this. What is important at this point is how large the wave will be,” Žimžek said.
However, Žimžek stressed that the foundations of Turkey’s economy were strong. Turkey’s current account is a fragile point for the economy, he admitted, adding on the other hand that, “If we look at the macroeconomic indicators in general, we see Turkey’s the ratio of public debt stock to national income has a downward trend.”
Turkey’s growth performance for 2011 will be above government’s expectations, Žimžek said.
The minister also commented on taxes imposed on telecommunications sector, saying they were “really” high. He added that an assessment of the situation was necessary. “We attach importance to this sector, but there are still problems. … There are sector demands, and we will do what we can in the coming term.”
The minister also said a tax incentive for domestic production of intermediary goods was also on government’s agenda. |
Source : hurriyetdailynews.com
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