‘There must be a soft landing in the economy’
Former Minister of Economy Prof. Dr. Işın Çelebi stated that in a possible change of power after the May 14 elections, the new economic administration that will come to power will have to implement a normalization program quickly and warned about some risks that may emerge.
Recalling that the management of the new economy has to turn the wheels by restoring market balances, Çelebi stressed the need to take measures to stop this, calculating that the wavelength and interest rates will grow. Arguing that the liquidation of the Protected Depository of Currency (KKM), which has reached a volume of TL 1.9 trillion (USD 100 billion), should be extended over time, Prof. Çelebi said: “The system must not lock yourself with quick movements just because it will solve the problem overnight. He said: “We must carry out this process calmly and without breaking down, and gently land the plane with low fuel in the integrity of the system,” he said.
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Çelebi stated that the budget deficit reached TL 655 billion and estimated that the budget deficit would reach TL 1.5-2 trillion when pension increases, promised payments and EYT spending are added, saying: “The need of resources is 300 billion dollars with Protected Currency Deposits and the estimated cost of the earthquake to reach 110 billion dollars. It is possible that Türkiye will finance this amount gradually.”
Noting that the Central Bank interest rate is above 8.5 percent and the loan interest rate is above 35 percent, Çelebi said, “Inflation has decreased to 43 percent due to the effect base. We cannot say that we will increase the interest rate as much as this inflation. Little by little, you have to manage everything that the market can absorb, first 15 percent and then 18 percent.
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The essential condition is to restore ‘democracy and justice’
– Member of the Faculty of the University of Altınbaş Prof. Dr. Işın Çelebi affirmed that the inflow of foreign capital in the world is 1.6 trillion dollars and that Brazil receives 50,000 million dollars of direct investment per year, while the inflow of foreign capital from Turkey has decreased to zero in the last 3-4 years.
Expressing that this is due to the issue of democracy and law, Çelebi said: “Turkey should receive 60 billion dollars of direct investment and portfolio per year to obtain 300 billion dollars of resources in 5 years. The basic condition is to restore democracy and justice, ”he said.
What precautions should be taken?
– Measures must be taken against shocks that may occur in exchange rates and interest rates.
– The settlement of the Currency Protection Deposit must be staggered over time.
– The budget deficit may amount to 2 trillion lire.
– The interest rate should be increased gradually as the market requires.