Turkey's Government Priorities: Strong Economy

The program of the Turkish Republic's 62nd government, formed by Prime Minister Ahmet Davutoglu, was read at the parliament Monday.



The economy will be the next most important issue for the new Davutolgu's government after democratization. The economy program has been prepared specifically to attain Turkish Central Bank's inflation target which remains at 5 percent, and aims to continue floating the exchange rate in the country. The country's statistical authority says inflation in Turkey rose slightly last month, from 9.16 percent in June to 9.32 percent, mainly because of rising food prices.



Prepared with a "strong economy" slogan, the main principles of the economic program consist of transparent, permanent, consistent, and foreseeable economic policies as the Central Bank will be independent in determining its policies aimed at price stability.



Turkey's former Prime Minister Recep Tayyip Erdogan, now the current president, and other government officials in the recent past have criticized the Central Bank for maintaining high interest rates, terming it as a possible limiting factor for economic growth.



 Selecting the 100th anniversary of the Republic of Turkey as a target, the AK Party aims at increasing the national income per capita to $25,000 and national income to $2 trillion.



The government plans to extend its support to individual pension schemes and encourages the participation of state lenders such as Ziraat Bank and Vakifbank in the scheme.



The government's program aspires to complete the project of Istanbul becoming an international financial center, with the aim of putting the city's name on the list of ten most important finance centres in the world by 2023.



The current account deficit will be specifically addressed by increasing the share of renewable energy sources and nuclear power plants. In 2014, the current account deficit is anticipated to shrink 6 percent of Turkey's GDP. 



The government aims to shrink the unemployment rate to 5 percent through strengthening relations between education and employment and developing social welfare insurance. Figures by Turkey's statistics authority show that unemployment in Turkey fell to 8.8 percent in May -- keeping a consistent downward rate for the fourth consecutive month.  



Unionization and labor agreements in compliance with EU norms will take into account standards set by the International Labor Organization.



Nuclear Power Plants will be developed in Mersin and in Sinop and high capacity coal power plants will be completed in order to exploit the country's coal resources so the country can become more self-reliant in energy and in the battle to tackle the current account deficit problem.



According to the government program, air transport aims to have a 400-million passenger capacity through their fleet of 750 aircraft. 



Turkey's foreign trade deficit has been in a downwards spiral for the seventh month in a row, according to figures released by TurkStat on 29 August after the country's Central Bank introduced drastic interest rate hikes in late January to stop the slide in value of the Turkish lira.



www.aa.com.tr/en - Ankara