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Turkish President Recep Tayyip Erdogan has launched his re-election campaign with a party pledge to slash inflation to single digits and boost economic growth as he seeks to extend his two decades in power in the May 14 vote.
Erdogan is facing the biggest political challenge since his Justice and Development (AK) Party came to power in 2002. Polls show support sagging in recent years since the Turkish lira has fallen steeply in value and inflation has skyrocketed. Opponents have blamed the president’s economic policies.
Even so, the president repeated his economic mantra that investment, production, exports and an eventual current account surplus would drive up Turkey’s gross domestic product.
“We will bring inflation back down to single digits and definitely save our country from this problem,” he told a crowd at an Ankara stadium on Tuesday.
Erdogan sought aggressive interest rate cuts, which the Central Bank of Turkey carried out, sending inflation to a 24-year peak of more than 85 percent in October before it dipped to near 50 percent in March. The ensuing cost-of-living crisis has gripped Turkish households and squeezed earnings and savings, bottoming out people’s purchasing power.
“We will improve the investment further with a structure based on a free-market economy integrated with the world,” the ruling party’s manifesto said. It aims for annual growth of 5.5 percent from 2024 to 2028 and GDP of $1.5 trillion by the end of 2028. GDP was just over $1 trillion in 2022.
Erdogan said last week that a team was working on strengthening economic policies under the coordination of former Finance Minister Mehmet Simsek, who is well respected by international investors.
Some AK Party members have previously said they wanted Simsek to champion a pivot to more free-market policies after years of unorthodox economic strategies.
However, the manifesto made no direct reference to a return to orthodoxy and said the low-rate policy was the main driver of entrepreneurs investing in the real estate sector and creating jobs.
In the presidential election next month, Erdogan will be up against the candidate for the main opposition alliance, Kemal Kilicdaroglu, and two other candidates.
In the latest survey from Metropoll, 42.6 percent of respondents said they would vote for Kilicdaroglu and 41.1 percent for Erdogan in first-round voting. The other candidates together received 7.2 percent support.
Support for Erdogan dipped slightly after February’s earthquakes, which killed more than 50,000 people in Turkey, because many voters believed the initial response to the disaster was too slow, according to surveys.
“We will completely heal the wounds caused by the disaster in 11 provinces and their neighboring cities by building a total of 650,000 new houses, 319,000 of which will be delivered in one year,” Erdogan said on Tuesday.
On foreign policy, the incumbent said he would continue normalising relations in the region. Ankara recently took steps to mend relations with Israel, Saudi Arabia, Egypt and Syria after years of tension. Erdogan also said he aims to build an “axis of Turkey”.
“We will build the axis of Turkey with a foreign policy where both our country, our region and humanity will find peace and stability, multilateralism, more cooperation, peace, stability and humanitarian diplomacy,” he said.
“We can negotiate with both sides in the Russia-Ukraine war, make concrete progress such as the grain corridor and prisoner exchange, and we can still speak of the possibility of peace,” Erdogan said.
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
©2024 Bloomberg L.P.
The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
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Published Apr 18, 2024 • 2 minute read
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
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The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
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Article content
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
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Article content
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
Article content
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