ANKARA
Turkey’s economy may fail to reach the government's growth target in 2015, Finance Minister Mehmet Simsek said on Thursday.
"It is possible to see growth drop below the 4 percent target set by the government's Medium-Term Economic Program,” Simsek said in a speech. "Investment is being postponed due to political uncertainty. Volatility in the global financial markets, rising geopolitical tensions as well as recession in EU have limited Turkish economic growth in the first half year," Simsek said.
Turkey’s second-quarter GDP growth of 3.8 percent was up from 3.1 percent in the first quarter, the Turkish Institute of Statistics announced on Thursday. The growth figure was higher than analyst forecasts, Simsek added.
Despite that, there is a negative risk for the medium-term growth target of 4 percent, although key indicators suggest a continuation of moderate GDP expansion, Simsek said.
“However strong sales trends in some key sectors such as automotive, housing and white goods indicate that economy continue to expand, even if at a moderate pace,” Simsek said.
Net export decline pulled down growth by 1.2 percentage points in the first half of the year due to the global economic slowdown, while the contribution of domestic demand to the growth was 4.4 percentage points, Simsek said.
But Simsek stressed that the foundation of the country's economy is still solid, thanks to structural reforms which were implemented in the last 13 years.
"There is no doubt that in order to pass on to a sustainable higher growth path in the middle to long term, Turkey must put structural reforms into practice quickly. And a strong political will is surely an essential condition for it,” Simsek said.
