Albayrak changes economic program, still ends up with crisis

Turkish President Recep Tayyip Erdogan’s son-in-law Minister of Treasury and Finance Berat Albayrak changed the name of the economic program and played around with the data, but the result is still pessimistic.

Turkish Minister of Treasury and Finance Berat Albayrak announced the MTP (Middle Term Program). The first thing Albayrak did was to change the name of the program to “The New Economic Program”, and as he explained the difference between the two, said the old one covered 2 years, while the new one covers 3.

In other words, the New Economic Program (Yeni Ekonomi Programı - YEP) will cover the 3-year term between 2019 and 2021.

Albayrak says this program’s “main motivation is the goal to author a new story of success”.

HOW REALISTIC ARE GROWTH ESTIMATES?

Albayrak didn’t touch upon the domestic or foreign policies of the AKP regime, nor the current situation it has caused at all, arguing that processes “from Gezi to July 15 to finally the US sanctions” are responsible.

“The program is based on three pillars: balancing, discipline and change,” said Albayrak and listed the growth goals: “GDP growth for 2019 is 2.3%, and for 2020 is estimated at 3.5%.”

As this statement was being delivered, the Organisation for Economic Cooperation and Development (OECD) lowered growth estimates for Turkey significantly. OECD lowered the growth estimate for Turkey for 2018 from 5.1% to 3.2%, and announced the estimate for 2019 as 0.5%, lowered from 4.9%.

INFLATION WILL CONTINUE TO RISE

Albayrak argued that their fundamental goal is to achieve 5% growth from 2021 onwards and make it sustainable, and said the following on their inflation goals:

“The target inflation for 2018 is 20.8%, for 2019 15.9%, and for 2020 9.8%. Inflation is expected to fall back to 6% in 2021.”

HOW WILL THE CURRENT DEFICIT BE LOWERED?

Albayrak also alleged that the decrease in the current deficit will continue: “We foresee that the current deficit to GDP rate will decrease to 3.3% in 2019, 2.7% in 2020 and 2.6% in 2021.”

SAVINGS IN PUBLIC SPENDING, BUT HOW?

Albayrak said they will be increasing savings in public spending, and added that they have founded a public finance change and conversion offices. Albayrak said the units they formed will bring 76 billion Liras in savings and revenue increases, but didn’t clarify how these savings will be accomplished or what precautions are to be taken to that end.

PROMISES OF DOUBLE-DIGIT UNEMPLOYMENT

Albayrak also announced unemployment targets and promised two-digit rates as 11.3% in 2018, 12.1% for 2019, 11.9% for 2020 and 10.8% for 2021.