Turkey is among the top countries investors want to move capital to thanks to the recent indications of liquidity improvement in the European market, said the head of the Industrial Development Bank of Turkey (TSKB) yesterday.
“The liquidity expansion showed the first signs with the recent decisions of the European Central Bank [ECB]. It will encourage many in Europe to search for alternative markets to invest, and Turkey will top this list of the countries,” said H. Fevzi Onat, chief executive of the TSKB at a press meeting in Istanbul. He spoke of the eurozone finance ministers’ Feb. 20 agreement to put up 130 billion euros in new loans under a revamped bailout package for debt-ridden Greece.
Current account deficit still manageable
According to Onat, there were some indications in European and United States markets to be hopeful on economic developments. Despite the growing concerns over Greece’s economic conditions, “Turkey can well continue to keep our cautious optimism,” said Onat.
Turkey would most likely be an attractive spot for capital movements in 2012, he noted
Talking about risks facing the Turkish economy, Onat said, “Turkey has two main economic problems: current account deficit and the recently peaked inflation.”
According to official figures, Turkey’s 2011 current account deficit increased by a substantial 65.3 percent from 2010, reaching $77.8 billion, an approximately $30.5 billion increase from the $46.6 billion last year. Turkey’s inflation also rose to 10.45 percent last year.
“We used to think that Turkey’s economy would be at serious risk when the current account deficit would be nearly 5 percent of the gross domestic product [GDP] of the country,” he said, noting that Turkey’s 2011 current account deficit came close to 10 percent of GDP.
“Still it’s manageable, as Turkey continues to find sources to finance its deficit,” said Onat.
However, “Turkey needs to take it down to 6 to 7 percent in a few years’ time,” he said. Turkey’s current account deficit would be nearly $68 billion by the end of this year, he predicted. TSKB posted a net profit of nearly $255 million last year, posting a 21 percent rise, above the 10 percent average of the sector in Turkey.
The lender’s credit volume expanded by 32 percent last year, hitting 6.4 billion Turkish Liras, according to Onat. He said the bank aims to reach 10 percent credit growth this year.
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Source : hurriyetdailynews.com
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