The European Bank of Reconstruction and Development (EBRD) considers developing Turkey’s economy one of its top priorities, a senior economist at the bank said.
“It is very hard to find a place in the Turkish growth model where the EBRD is not a partner. We are very much committed to supporting Turkish growth and development,” Sergei Guriev, the bank’s chief economist, told Anadolu Agency exclusively.
He underlined that Turkey is the EBRD’S largest country of operations in terms of business volume and portfolio.
Praising Turkey’s 2017 growth rate of 7.4 percent, mainly driven by the Credit Guarantee Fund and recovery in the eurozone, Guriev said the economy will continue to grow at “fast rates” in 2018.
He said the EBRD projects Turkey to grow by 4.2 percent in 2018, below the government’s target of 5.5 percent.
“Even 4-4.5 percent is a strong growth performance in the current circumstances. We consider the Turkish economy resilient and driven by the private sector integrated into the global economy, and we see many reasons to be optimistic, as the Turkish economy is continuing to grow,”
Guriev stated the European bank supports structural reforms in Turkey to help it remain competitive.
“Turkey needs to do reforms in the labor market, taxes, and regulations, invest in innovation, high-value manufacturing sector, and high value-added services sector,” he said.
-Private sector, demographic strength
A national energy efficiency plan for Turkey carries importance for the bank as it is committed to green economy investments, he added.
Guriev stated that although Turkey has a number of factors supporting growth, its current account deficit and high inflation make it vulnerable.
Underlining that high inflation undermines the development of long-term financial instruments denominated in the Turkish lira, Guriev said addressing this should be a priority for the government and Central Bank.
Guriev highlighted that the dynamic private sector – including large conglomerates as well as SMEs – is Turkey’s “most important” strength.
“The commitment of society and government to this private sector-driven growth is definitely Turkey’s strength,” Guriev said.
He said the country also benefited from its young demographic structure, which makes it the envy of other countries.
Guriev added that Turkey is a unique hub for trade and investment with the support of its geographical position, close to Europe, Russia, Asia, and Africa.
Asked about a possible trade war between the U.S. and China, Guriev said the bank is concerned about protectionist sentiment around the world, as trade and globalization is the major driver for fighting global poverty.
“Turkey should be concerned as well. Because Turkey depends on being able to export and attract investment from advanced economies,” Guriev said.