Turkey's primary target: Total struggle with inflation

Growth figures show process of economic stabilization, one of Turkey's major targets, has begun, says finance minister

Turkey's primary target: Total struggle with inflation

The Turkish economy's primary targets are a total struggle with inflation and reducing the current account deficit to sustainable levels, the treasury and finance minister said Monday.

"The tight stance in fiscal policy backed by structural reforms, and the macroeconomic stabilization policy will bring economic growth to a healthier path in the medium term," Berat Albayrak said in a statement. 

Albayrak's remarks came after Turkey's statistical authority announced that the country's economy grew by 5.2 percent in the second quarter of this year.

"Despite the moderate slowdown in consumption and investment, the economic growth in the second quarter continued with domestic demand," he said. 

"However, both the solid performance of exports and tourism revenues provided the net foreign demand's positive contribution to the economic growth," Albayrak added.

The minister said this shows the process of economic stabilization, which is one of the country's major targets, has begun. 

He said the growth figures revealed that the Turkish economy is moving in the direction of export-led growth -- another essential target. 

"Preliminary indicators show that deceleration in domestic demand will become evident in the third quarter," he said. 

"Throughout the rest of the year, it is expected that the net foreign demand will effectively contribute to the growth with continuing strong trend in export and tourism revenues plus falling import demand." 

Albayrak also noted a need for a set of macroeconomic stabilization policies for a more determined fight with the fragile points in current account deficit and inflation. 

"A fair sharing of the prosperity brought by this growth will be achieved with our qualified human resources and strong society," he added.

Turkey's annual inflation was 17.90 percent in August, up from July's figure of 15.85 percent. 

Over the past five years, the annual inflation saw its lowest level at 6.13 percent in April 2013, while the figure reached its highest level last month. 

According to the Turkish Central Bank, the country's current account deficit stood at $2.97 billion in June, while the 12-month rolling deficit had reached nearly $57.4 billion.

Turkey's annual current account deficit in 2017 was around $47.5 billion and amounted to some $33 billion in the previous year.

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