Turkey’s economic recovery to continue: Turkish finance minister

Speaking to Anadolu Agency in Ankara, Naci Agbal said the recovery would come on the back of government incentives, ongoing structural reforms, increasing consumer spending and increased political stability.”The last year was a difficult year for the Turkish economy,” Agbal said. “[Turkey’s government] introduced many measures to boost growth. We expect a quick recovery in Turkey’s growth this year,” he added.

On Tuesday, the World Bank forecast Turkey’s growth rate would be 2.1 percent in 2016 and 2.7 percent in 2017.

Agbal said inflation, which stood at 9.22 year-on-year in January, would ease from the second half of 2017 as food supplies and exchange rates stabilize.

According to the minister, the recent rise in inflation was mainly due to the Turkish lira’s fall against the U.S. dollar and new price regulations.

Agbal said a 6.7 percent special consumption tax on white goods had been reduced to zero and an 18 percent VAT on furniture was cut to eight percent for next three months, in a bid to support domestic demand.

“The reductions will cost the government around one billion lira ($267 million),” he said.

Agbal also said a strong presidential system in Turkey would lower uncertainties for the economy and accelerate structural reforms.

A referendum on the country’s new constitution, expected in April, will cost around 192 million Turkish liras ($51 million), the finance minister said.

The minister also added the government would not change its medium-term economic program.