Economy of Turkey

The global economy's largest problem is a credibility gap, rather than budget deficits, said Deputy Prime Minister Ali Babacan at the first B-20 meeting abroad during Turkey's G-20 presidency.

"The more rapidly we close this credibility gap, the faster we all build confidence. This will bring all of us robust and sustainable growth across the world," he said on Feb. 22.

The top representative of Ankara industrialists has taken a different approach on the ongoing debate over central bank independence and suggested the Turkish president might have ulterior motives for publicly criticizing the Central Bank governor.

Turkey needs to maintain its fight against inflation until it falls below an annual rate of 5 percent for good, Finance Minister Mehmet ?im?ek said Feb. 18 in an interview on Turkish news channel CNN Türk.

He added too much talk over the Central Bank's monetary policy may cause concerns among investors.

An unusual trend has been the case for the Turkish economy for a couple of years. The country?s outward direct investment has been rising, although it has started to attract fewer FDI.

According to the Central Bank data, Turkey lured around $12 billion of FDI last year, lower than the 2013 figures. Turkey?s FDI inflow has actually been decreasing for a couple of years.

A senior delegation from the European Bank for Reconstruction and Development (EBRD), led by President Sir Suma Chakrabarti, will visit Turkey on Feb. 19-20 to discuss the bank's investment priorities in Turkey with senior government officials, members of the business community and civil society organizations.

Finance Minister Mehmet ?im?ek has backed the Central Bank amid increasing criticism against the bank from political circles due to its rate policies.

?The Central Bank has performed well and the government trusts the bank,? ?im?ek said in a meeting in the Black Sea province of Sinop on Feb. 14.

Turkey?s largest mobile operator Turkcell posted a lower-than-expected net profit of 258 million Turkish Liras ($105 million) in the fourth quarter,  due to foreign currency losses in operations in Ukraine and Belarus.

When currency rate policies become a point of daily political polemics in a country, this has many negative effects on the country as a whole, pushing the risk premiums and rates up, making the country less predictable, said Deputy Prime Minister Ali Babacan on Feb. 12, in a TV interview on the state-run TRT channel.

Central Bank Governor Erdem Ba?ç?, who has recently been criticized by many political figures for not cutting the Bank's rates, moved on Feb. 7 from his public lodgings, in which he had lived for the past four years. Ba?ç? was claimed to have moved to another house, which is close to his children's school.

The Turkish lira sank to yet another all-time low Feb. 9, a fresh historic low of 2.4950 against the dollar, hit by expectations the U.S. Federal Reserve could raise interest rates mid-year, bolstering the dollar and reducing appetite for riskier emerging-market assets.