In Turkey, all roads lead to the IMF according to economists

12:38 19/12/2020 - Πηγή: Armynow

Turkey may be forced into a new economic rescue programme with the International Monetary Fund due to policy mistakes and low financial resources, economists said on Friday, according to Dünya newspaper.

Turkey should seek to repair relations with the largest sponsors of the Washington D.C.-based IMF to make

a loan deal possible, said Refet Gürkaynak, a professor of economics at Ankara’s Bilkent University and former economist on the Federal Reserve Board, according to Dünya.

The country’s public finances have deteriorated substantially, rendering them unworkable, and Turkey needs a comprehensive economic reform programme and the necessary capital to finance it, Gürkaynak said.

Last month, Turkish President Recep Tayyip Erdoğan pledged sweeping economic and judicial reform for Turkey after replacing the governor of the central bank and hiring a new treasury and finance minister. Erdoğan made the changes after the lira slumped to successive record lows against the dollar. The central bank has since hiked interest rates to 15 percent from 10.25 percent to help arrest the currency’s slide, dollarisation and to tackle double-digit inflation.

Turkey is entering a period of high inflation that will put some companies in insurmountable financial difficulties, leading to bankruptcies and increased poverty, said Uğur Gürses, a former central banker and a columnist on the Turkish economy. Inflation accelerated to 14 percent in November, the highest in major emerging markets after Argentina.

The Turkish government’s relations with its Western allies have deteriorated significantly over the past two years. The United States and the European Union have issued sanctions over bilateral disputes, which include Ankara’s purchase of Russian-made S-400 air defence missiles and its exploration for hydrocarbons in waters of the Mediterranean contested with Greece and Cyprus.

Turkey’s arguments with major Western powers are making the economic situation more difficult and those countries will sit around the table to decide on any loan programme, Gürses said, according to Dünya.

Source: ahvalnews.com

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