ISTANBUL - Turkish Daily News
Despite the current political uncertainty, Middle Eastern investors express great confidence in the dynamics of the Turkish economy.
“No matter who is in the office and which political party rules, the Turkish economy has benefited a great deal due to the policies of the past few years,” Amjad Ahmad, chief executive of NBK Capital Investment & Merchant Banking, told the Turkish Daily News yesterday. “So I think no matter who comes to power, they will continue that momentum.”
Speaking on the likely affects of the political uncertainty on foreign investors, Ahmad said they “believe in Turkey in the long term.”
“It is a strong economy and things are improving here day by day,” he said, speaking on the sidelines of the Euromoney Turkey Finance and Investment Forum. “We never come to a market for short-term gains. Turkey's dynamics are very strong and that is why we will continue to do business here.”
Taking a breath:
Ahmad disagreed with the idea that the slowdown in growth rate signifies a structural problem. Turkey's economy has been growing rapidly in this period and the current decline signifies that “it is time to take a breath,” he said. Considering the estimated growth rate for this year, which is expected to be around 4 or 4.5 percent, he noted “this is not such a bad growth rate.”
No matter what happens politically, Turkey continues to be a key market for Gulf investors.
“Considering the given huge liquidity surplus in our region and the lack of investment opportunities within the region itself, Middle Eastern investors have to look outside,” Ahmad said. “I think places like Egypt and Turkey have benefited from that and they will continue to benefit.”
“The economy is very promising here. More importantly, a lot of companies from the region have ties to Turkish companies,” he continued. “They worked with Turkish companies for many years. I think they consider Turkey as a natural source of growth. So you will continue to see more private equity players from the Gulf here.”
The Gulf's private equity funds consider Turkey as a safe haven to invest in the long term, he added. “Private equity people are experts of managing risk. I think a lot of them are really interested in Turkey. Yes, there is some hesitation at the moment, but they are aware of the fact that Turkey is a magnet for investment.”
Price stability the key:
Meanwhile, speaking at the forum, Central Bank Governor Durmuş Yılmaz emphasized the increasing strength of the Turkish economy against negative effects of global financial fluctuations. “Such strength is a result of the macroeconomic policies and structural reforms that are implemented in a determined way,” said Yılmaz.
Considering the rise in inflation, which surpassed the 10-percent threshold, Yılmaz said all emerging economies are experiencing high inflation and low growth rates “The fluctuation in global markets and the rise in food and commodity prices are the main reasons for that,” Yılmaz said. “Price stability is the crucial factor for sustainable growth,” he continued. “To that end, we adopted the inflation targeting regime in 2006. When we look back, we see that the rise in food and energy prices resulted in higher rate of inflation than was expected.”