NEW YORK
Turkish Prime Minister Ahmet Davutoglu on Thursday reaffirmed his government’s commitment to the independence of the country’s central bank, during an address to an international think thank.
Davutoglu tackled concerns about Turkey's economy and foreign policy at the Council on Foreign Relations on the second day of his New York visit – a trip in which promoting U.S. investment in Turkey is a priority.
Davutoglu's remarks comes at a time as the bank faces repeated criticism from President Recep Tayyip Erdogan and other government officials for its tight money policy, which some argued limited growth.
"Here what we need to understand is that, yes, the central bank is independent and it is taking its own decision ... but at the end of the day, the performance of the central bank and performance of monetary policy is part of the general economic performance," Davutoglu said.
He said many central banks in Europe also face criticism, and managing rates in a way that keeps economy strong is a big challenge for each of them.
"We want to have more growth, and for more growth we want to have less inflation, less interest rate. That is the challenge we need to achieve," he said.
The Turkish economy has enjoyed a strong growth rate of more than 5 percent since 2002, fueled by trade and foreign investment. The growth has been faster than much of the industrialized world.
The World Bank forecasts that Turkey grew 3.1 percent in 2014, a figure considered relatively weak by Turkish standards.
"We are not satisfied with this 3 percent. We want to make it 4 percent at least this year and 5 and 6 percent in subsequent years," Davutoglu said.
He said one of the primary objectives of his government is to bring a "paradigm shift" to the Turkish economy by achieving qualitative change.
"Until now, in the last 12 years, we have tried to have a quantitative change in our economy ... now we want to make a qualitative transformation in the economy, meaning there will be more value-added production, and there will be more R&D (research and development), more high technology," he said.
In November, Davutoglu announced a comprehensive plan to boost Turkey’s economy through wide-ranging structural reforms in various sectors, including trade, energy and health.
The plan, presented by Ali Babacan, deputy prime minister in charge of economy, is comprised of nine packages with 25 prioritized structural reforms.
Davutoglu said the government was planning to increase Turkey's GDP -- the broadest measure of economic output and growth -- to $1.3 trillion by 2018 and $2 trillion by 2023 from $820 billion in 2013.
"When you look at crises and the decline in the world economy, this seems to be quite ambitious but many of our targets in 2002 were ambitious and today we have realized it," he said.
