Turkey Announces 7.5b Liras Economic Package Ahead of Elections

Prime Minister Ahmet Davutoglu announced a series of measures worth 7.5 billion liras to boost the country’s flagging economy ahead of parliamentary elections in June.

The package includes a 4 billion lira boost to pensions and the creation of 120,000 temporary jobs, said Davutoglu at a press conference in Ankara.

The measures “won’t have a negative impact on either the budget or economic balances,” because it will lead to an increase in tax income and employment, spurring growth, Davutoglu said. “We would comfortably reach the 4 percent growth target this year,” he said, blaming arid weather conditions on 2.9 percent growth in 2014.

Other measures include providing insurance premium support to employers and canceling tax on forward good imports. Turkey’s development bank, Kalkinma Bankasi, will be reorganized to support production and employment, and the government will submit a bill to parliament allowing small and medium-sized companies to use movables as collateral, he said.

The package comes two months before parliamentary elections in which Turkey’s governing AK Party is seeking to extend its 13 year-long rule of the country. Pressure is building on the government to revive the economy after manufacturers on Wednesday signaled the worst production slowdown since 2009.

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