Answering questions about economic developments during a program on NTV/CNBC-e Thursday, Ekren said new arrangements are possible for the unemployment benefits fund.
The minister said the central bank's decision to reduce interest rates by 0.75 percent was a correct move. Financial indicators are extremely important for countries such as Turkey, considering that the effects of the financial crisis are continuing, he said, adding that a proper low interest rate will allow Turkey to strengthen its hand. He also said the decision to lower interest rates shows there is a good understanding of the problems in the economy.
Ekren noted that public debt would increase in line with the increase in the budget deficit and explained that the first quarter of the year was filled with debts from the previous year. He underlined that if the crisis had not erupted, there were public expenditures that they could have managed; but because of the crisis, they were naturally required to re-examine some items in the budget. Noting that they were preparing a package of precautionary measures for the Turkish economy, he said three or four packages will be introduced in the next two to three years. One of these packages will be for the private sector, one for specific sectors and another for companies to restructure themselves. A tax exemption may be granted for companies that will be restructured.
Ekren noted that it was important to look at trends from the previous months in order to understand whether Turkey was recovering from the crisis or not. Looking at last month's trends, there are improvements in capacity utilization, industrial production, the real sector and consumer confidence. Although unemployment figures remain high, Ekren said the increase was caused by an increase in the labor force participation rate among people aged 15 and older and noted that during times of economic crises more people start looking for jobs, thus inflating unemployment rates. Ekren noted that they are also working on an additional package for unemployment that will make unemployment benefit regulations more flexible and possibly increase the amount disbursed.
The state minister also said this crisis was different from past ones and could not be compared. Although the figures don't show the crisis as having ended, they do signal improvement, he noted. Negotiations with the International Monetary Fund (IMF) will be concluded soon, Ekren said, adding that IMF funds may be used to support the real sector and social institutions.
The government's recent move to reduce the private consumption tax (ÖTV) on motor vehicles showed that citizens can make purchases without borrowing money from banks, Ekren said, pledging to focus on macroeconomic developments.
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