Turkey should maintain its fiscal discipline in 2012 to reach the light at the end of the tunnel

Just before we are about to finish a year full of problems and major challenges for the world, Turkey seems to have performed well up to expectations and is able to look at the coming year (2012) with much more self-confidence.

In fact, it has been among few countries with top GPD growth in 2011 on top of its success in handling major political issues on the int’l arena.

In the meantime, Central Bank governor has made some announcements to declare issues concerning Turkish financial markets and confirmed that inflation and other important  factors are totally under control in spite of the unclear situation prevailing in European economies.

However, we strongly believe Turkey should not fail to commit to the fiscal discipline targeted by the government for the year 2012.

Furthermore Turkey should continue to pay utmost attention to monetary policies to avoid any likely deviation as well as introduce structural reforms without any delays.

We know Europe suffered a major economic crisis in 2008 after which hopes of recovery were raised in 2012. Unfortunately this positive situation did not last for long simply because Europe mainly suffers inability to get to the bottom of problems and lacks strong will and support from concerned parties to include establishments in the first place. As this situation was percieved in the markets, confidence indicators went backwards to make matters even worse, only.

We also know from experience in the recent years that a very likely situation applies to the case in the USA which has created a negative atmosphere to cause American companies refrain from spending their resources of trillions of uS dollars. The main reason here was confidence again which made the economy inoperable.

In these cases all they could do was for the central banks both in EU and the US to inject lots of money into the market,

As for Turkey we know this country has one of the rare economies without noninterest surplus and the good news is the budget deficit is expected to be decreased in the upcoming period, as well.

To recap, provided Turkey sticks to its fiscal discipline, the light at the end of the tunnel will be there to see.

28.12.2011
Editor, BTT