What We Learned From Turkey's Top Two Economic Policy Makers

  • Central bank’s Cetinkaya, Deputy PM Simsek speak ahead of vote
  • Simsek cites resilience; Cetinkaya discusses inflation, rates

Turkey’s top two economic policy makers spoke Wednesday about the economy ahead of a key referendum next month. Here are some of their main comments.

Central Bank Governor Murat Cetinkaya

The central bank has room to tighten monetary policy and will do so if necessary, Cetinkaya said in a speech to industrialists in the southwest province of Denizli, his last scheduled appearance before the March 16 rates decision.

“We’ll be closely watching factors that affect inflation and pricing behavior, and can implement additional monetary tightening if necessary,” he said.

“Inflation during the first two months of the year shows that there is no important divergence from the path we had forecast,” he said. Consumer prices rose an annual 10.1 percent through February -- more than twice the bank’s annual target.

Click here fore more on Turkey’s recent monetary policy actions.

Deputy Prime Minister Mehmet Simsek

If there is one story to be told about the Turkish economy, the theme should be resilience, Deputy Prime Minister Mehmet Simsek said in Ankara. The economy contracted after the failed July 15 attempt to overthrow Turkey’s elected government and President Recep Tayyip Erdogan, but later resumed growth, he said.

Passage of the April 16 referendum on expanding the president’s powers should usher in a return to “normality” and eventually allow a faster pace of reforms, Simsek said.

“I want my country to do much better than it is. It’s nowhere near where I hoped or what I had worked for,” Simsek said. “I’m convinced April 16 will be a closure.”

“The short-term challenge is, of course, Turkey’s perception has deteriorated,” he added. “There’s no question.”

Simsek also commented on Turkey’s relations with the West and in particular the U.S., whose assistance to Syrian Kurdish fighters has enraged the Turkish government because they are aligned with the separatist Kurdistan Workers’ Party, or PKK, which has been waging a war on Turkish soil for more than three decades

“What Turkey is experiencing with its allies in the West is traumatic,” he said. America’s engagement with affiliates of the PKK is “very hard to understand,” and “we do hope the Trump administration will have a better understanding of Turkey’s concerns,” Simsek said.

“It’s not all bad news, not as bad as you think,” he said.

— With assistance by Selcan Hacaoglu

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