Turkey’s Deputy Prime Minister says “We did not expect so much depreciation in TL”
Regarding the rise of the US dollar against Turkish Lira, Deputy Prime Minister Mehmet SIMSEK said: “We had a 1.7 percentage point decrease in inflation at the end of the year, less than we expected. We did not foresee such a rapid depreciation in Turkish Lira”.
We had a referendum in 2017. Despite all this, Turkey has maintained its fiscal discipline. It will not be right to evaluate details. I want to draw a clear line. We have a very clear performance. Despite issues such as elections and referendums Turkey has dropped the ratio of debt to GDP from 70 percent to 28 percent.
Even if the AK Party government has had to take some decisions, it has the performance to fix it or maintain fiscal discipline. Immediately after the new government is established, these reforms can be taken as a starting point.
Yes, there is a current account deficit in Turkey. Companies have foreign exchange deficit. This is not new. If you are growing much faster than countries you are competing with your currency should normally be valued. This is a strong theory in the economy.
They grew so fast that they would enter the European Union, do you know what happened? In all of those countries, currencies appreciated in real terms. During the years 2000-2008 was the case in Turkey.
We had a 1.7 point drop in inflation compared to the end of the year. We expected a stronger decline and we did not foresee such a rapid depreciation in Turkish Lira.
