Rising unemployment around the world is having a negative impact on aggregate demand, which is hindering the recovery and reinvigoration of domestic economies, Yılmaz noted. “I believe that constructive developments in the labor market will contribute positively to aggregate demand and that this will pave the way to recovery from the crisis,” he said.
Yılmaz further emphasized that the world is experiencing a sense of relief in terms of risk perception and liquidity conditions and went on to say: “Looking at growth rates in the world, a number of indicators such as industrial output still point to the presence of vulnerabilities in the global economy. Despite the declining tendency of contraction, we think that it is still too early to mention a serious recovery from the crisis.”
In addition Yılmaz asserted that recuperation in global risk perception has had a positive impact on Turkish markets so far, which is displayed in the exchange and real interest rates.
Yılmaz further criticized credit rating agencies for not appreciating Turkey’s performance during the crisis and not raising its ratings accordingly. He underlined that Turkey’s ratings are still far from showing that Turkey is an investable country. “We continuously present this anomaly to the attention of all international platforms,” he added.
Thanks to improving financial stability and changes in the euro/dollar rates, the Turkish lira has started to gain value against the dollar again, which is causing problems for exporters, Yılmaz said. He underlined that this result is not a byproduct of the central bank’s policies and pointed to the effect of global developments on the domestic exchange rates.
Yılmaz praised the continuation of fiscal discipline and said the central bank’s decisions always take the progress in fiscal policies into consideration. “The Turkish government and all the governments in the world must commit themselves to keep fiscal discipline. Turkey has drawn a path for itself with its latest Middle-Term Economic Program. It is all about how to conduct it and how to make the premises set out in the program more tangible and concrete,” Yılmaz said and underlined that there will be no significant changes in monetary policy as long as the government abides by the pillars of the economic program.
