Türkiye might have faced many problems if it had not implemented its own economic model, Treasury and Finance Minister Nureddin Nebati has said, Trend reports citing Hurriyet Daily News.
“The Türkiye Economy Model aims at putting the economy on track for sustainable growth, overcoming cyclical global problems and defeat the middle-income trap,” he said speaking at the Economic Transformation and New Paradigms Summit held in Istanbul.
If Türkiye had not implemented the new model, it could have simultaneously faced stagnation and inflation and many other problems, the minister added.
Despite the favorable developments in investment, job creation, production and exports, inflation which is a global issue is the main problem in Türkiye and the government is using all necessary measures to shield citizens from rising prices, Nebati said.
He cited the higher energy and commodity prices, logistics costs, the rising food prices and other pandemic-related factors as the main reasons for inflation in Türkiye.
“The increase in foreign exchange rates and inflation inertia also contributed,” Nebati said.
One of the main pillars of this model, which was designed to address all the structural problems of the Turkish economy permanently, is to boost confidence in the Turkish Lira, the minister added.
He added that orthodox economic policies which was presented as the only recipe for growth eventually ended up with current account deficit and crises.
Türkiye aims to overcome the middle-income trap by encouraging production and boosting exports though a selective loan policy, the minister said.
Nebati added that the government is working to facilitate small and medium-sized companies’ access to loans.
The new economic model was also designed to turn Türkiye into a global supply center, he said, adding that the current crisis in the world economy offers opportunities more than it poses risk to Türkiye.
Meanwhile, the Central Bank yesterday released the minutes from its latest rate-setting meeting
The bank stressed that it will continue to use all available instruments decisively within the framework of the liraization strategy until strong indicators point to a permanent fall in inflation and the medium-term 5 percent target is achieved in pursuit of the primary objective of price stability.
“The [Monetary Policy] committee supports building strong policy coordination and a holistic macro policy mix involving all stakeholders in order to achieve price stability,” it added.
It repeated its view that disinflation will start on the back of measures taken and decisively implemented for strengthening sustainable price and financial stability along with the resolution of the ongoing regional conflict.