Turkey’s government to announce medium-term plan to stabilise economy
Turkey’s government will unveil its medium-term economic plan today in a bid to stave off a major meltdown. Finance Minister Berat Albayrak has promised “realistic macro targets” and savings measures, saying the plan will have an emphasis on reducing inflation and the current account deficit.
Therefore, the plan will focus on fiscal policy—either decreasing government spending or decreasing taxes to stimulate economic activity. Albayrak is on record as wanting to maintain budget discipline and President Recep Tayyip Erdogan himself has signalled that big investments will be curtailed or delayed.
Expect this to directly affect huge infrastructure projects that were a big part of Mr Erdogan’s June re-election campaign. This includes the controversial $15 billion Canal Istanbul project first mooted in 2011—a symbol of Erdogan’s grand vision for Turkey and a point of derision from the opposition as a grand waste of public money. Erdogan’s ministers have maintained the project is going ahead. However, do not be surprised if it is delayed yet again.
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