New Finance and Treasury Minister Elvan promises discipline, reform and transparency

The freshly appointed treasury and finance minister Lutfi Elvan addressed the Parliament’s Plan and Budget Committee during budget discussions wowing to make structural reforms to improve the investment climate for domestic and international entrepreneurs. 

Elvan’s words promising reforms, discipline and transparency is good to hear.  Yet, while all had been waning over the course of past few years under the same AKP government requires him to “deliver” to regain long-lost credibility in the eyes of the investors.

“Turkey’s risk premium will be reduced through economic policies that will be implemented in a transparent, predictable, and stable manner,” he said.

He added that Turkey will post 0.3% GDP growth in 2020 based on the recovery trend in consumption, investment, and exports.

He added that the country will provide price stability, protect fiscal discipline, increase coordination between monetary and fiscal policies, enhance the investment climate and focus on a production-based income model while generating social and economic transformation programs to reduce the negative effects of the pandemic.

Minister Elvan, claimed that they will work for the re-establishment of the financial maneuvering area lost by the economic measures taken in the epidemic.

Minister Elvan reminded that  the fiscal success and Turkey’s low public debt levels achieved during the previous AKP governments were the most important support elements in combating the epidemic  Elvan said they would re-create fiscal discipline in order to create a similar area of maneuver for Turkey.  

Lutfi Elvan emphasized that a balanced growth was expected in 2021 depending on both domestic and foreign demand. Stating that the industrial value added increase due to exports will exceed the targeted general growth rate of 5.8% set for 2021  adding that the vaccine would also have an effect on domestic demand. Elvan said, “The vaccination will reduce uncertainties, and postponed consumption and investment expenditures will support domestic demand.”

Minister of Treasury and Finance Elvan emphasized that decisions would be taken in coordination with regard to monetary and fiscal policies aiming to lower Turkey’s 12% CPI inflation. Regarding the economic policies to be followed, “Our economic policies are designed with the main purpose of sustainable growth and employment increase. In line with this main goal, decisive steps will be taken to strengthen financial stability, to reduce inflation with the coordination of monetary fiscal and income policies, to fully establish fiscal discipline, and to transform our production capacity into an innovative structure that has internalized the export-oriented digital transformation ”.

Elvan also stated that given the COVID-19 related spending the budget deficit increased slightly due to the increase in expenditures and the drop in revenues, but that the revised end-2020 estimate was below 4.9%.