The recovery started last year, Zachau said and went on: “Even though the official numbers haven’t been disclosed yet, the growth rate in the fourth quarter of 2009 seems to be on the positive side compared to the same period a year ago. The fundamentals of the Turkish economy are still sturdy.”
Speaking to the Anatolia news agency on Wednesday, the World Bank official shared his remarks regarding the Turkish economy’s performance in 2009 and its possible course this year. Zachau reiterated the World Bank’s official expectation of around a 3 to 4 percent growth rate in 2010 for Turkey, especially fueled by a reinvigoration in domestic consumption. “Indeed, the results of a set of recent surveys conducted among households and companies show an increasing optimism,” he argued. Growth will bounce back to positive rates this year but this situation will not immediately cause a decline in the unemployment rate. “Therefore, Turkey will continue to see high unemployment rates especially among its youth,” he asserted.
To battle the joblessness, Turkey must adopt sound labor market policies, such as apprenticeship education and job search supports, he said.
An IMF deal may help
Zachau mentioned a possible International Monetary Fund (IMF) deal, too, saying its effects will largely depend on the details of the stand-by deal. Such a deal would primarily have two effects, he noted and went on: “The agreement may provide extra external financing, which will increase the country’s reserves and decrease the government’s borrowing requirement from the domestic market. In addition to this, investors may assess the agreement as a useful anchor for economic policies.”
As regards the potential risks that may influence the Turkish economy, Zachau pointed to external conditions and underlined the significance of an austere commitment to the Medium-Term Economic Program to thwart these risks. “Another risk factor is a decline in investors’ confidence in the Turkish markets due to domestic political and economic factors,” Zachau noted and again stressed the importance of loyalty to the Medium-Term Economic Program, abiding by a policy of fiscal discipline and furthering reforms.
