Commenting on the potential outcome of an anticipated deal with the fund, Hisarcıklıoğlu said the Turkish lira could gain much in value after an IMF deal and that this could lead to a boost in imports “unless the government takes action.”
Observers have recently warned that following an IMF cash inflow, the lira will gain in value against other currencies, which could put an extra burden on Turkey’s exporters. Declining exports will eventually bring about a slump in production, and the Turkish domestic market will import more than it did in 2009, the TOBB chairman said.
“During the 2009 global credit crunch, most banks in Turkey were reluctant to extend loans to companies that were under the strain of the crisis, while they opted instead to lend money to the state. This dealt a major blow to new investment in the country,” Hisarcıklıoğlu explained. He said an IMF deal would have both positive and negative impacts on the Turkish economy.
Recalling that the government recently said they would use the IMF funds to repay domestic debt and compensate for a large budget deficit, the TOBB chief said: “When you look at the situation from this point of view, the state will not have to borrow money from the banks. This means that banks will be able to extend more loans to the non-financial sector than they did during the 2009 crisis. This is a positive result.” On the other hand, Hisarcıklıoğlu argued, with the lira gaining further in value, exporters will find it hard to maintain the same export figures as in the years prior to the crisis. According to the TOBB head, this could lead to a noticeable plunge in Turkey’s production.
As regards expectations for this year, Hisarcıklıoğlu said his union expected the Turkish economy would perform better in 2010 than in the preceding year. “This depends mainly on the government’s commitment to implement the necessary measures in a timely fashion. We are sharing our suggestions with government officials, and I have faith that the economy administration will take the necessary steps in this regard.”
