Economy

'Strong public finance to remain important pillar of Turkey's macroeconomic stability'

Turkish finance minister says FX rate will stabilize, risk premium decrease as fight against inflation continues

Aysu Bicer and Gokhan Ergocun   | 16.11.2021
'Strong public finance to remain important pillar of Turkey's macroeconomic stability'

ANKARA 

Strong public finance will continue to be an important pillar of macroeconomic stability in Turkey, the country's treasury and finance minister said on Tuesday.

"The careful and selective public finance policies we implemented during the pandemic have positively differentiated the Turkish economy compared to developed and developing countries," Lutfi Evan said in a speech at the Turkish Capital Markets Congress in Istanbul.

Public finance balances in many countries have also been harmed severely amid the pandemic, explained Elvan, adding that in such a difficult period, Turkey's economy performed well in production, investment, growth, and employment indicators.

"On the inflation front, unfortunately, we aren't at the level we desire," he underlined.

Stressing that foreign exchange rates will stabilize and risk premiums will fall as the fight against inflation continues, Elvan said: "The global conjuncture and the domestic outlook reveal that we need to be extremely careful in the fight against inflation."

"As I always underline, we're in favor of private-sector-led, balanced, sustainable, competitive, and employment and environmentally-friendly growth," he said.

Elvan also said the Treasury and Finance Ministry clearly showed determination in fighting inflation, taking timely macroprudential measures when necessary.

Turkey registered an annual increase of 19.89% in consumer prices in October.

On Oct. 28, Turkey's Central Bank raised its year-end inflation forecast to 18.4% for 2021, up from 14.1% in its previous report.

Turkey eyes active role in green bond market

Elvan also touched on the issue of sustainability, saying the government took steps to establish infrastructure for the green bond market in Turkey, which he said is in great demand in international markets.

"Within the scope of our international borrowing transactions, we published our Sustainable Finance Framework Document to be able to borrow in the ESG (environmental social and governance) market. As Turkey, we want to be an active player."

Elvan also said other steps for the private sector to issue green debt instruments and green lease certificates would be taken. "We plan to publish a guide on this subject by the end of the year."

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