Turkey’s Finance Minister Sees Economy Staging V-Shaped Recovery
Turkey expects a V-shaped recovery in the economy as domestic demand improves.
“Leading indicators from June give positive signals for an improvement in the economy,” Albayrak said at a Turkish Banks’ Association meeting in Istanbul. The minister cited an increase in consumer confidence, as well as a jump in the country’s manufacturing Purchasing Managers’ Index.
The minister asked lenders to act in line with the government’s development targets and not to prioritize short-term profitability. He advised them to accelerate debt restructurings and to start working on club loans.
The coronavirus crisis has thrust Turkey’s banks into the spotlight, with state-owned lenders in particular playing a key role in stabilizing the nation’s markets and helping the government finance its budget deficit. Authorities have leaned on banks to extend loans to businesses and households to avoid cash injections that could worsen the fiscal outlook.
The nation’s three largest state-owned banks began offering products from mortgages and credit for home appliances to holiday packages at below-inflation interest rates. Over 100,000 consumers took out loans under the state banks’ low-interest mortgage campaign that began earlier this month, with total placements at around 25 billion liras ($3.7 billion), Albayrak said.
“If I had to bet on any emerging market rebounding and posting a V-shaped recovery, I would say Turkey, given the young population and huge desire for credit,” said Timothy Ash, a strategist at BlueBay Asset Management LLP in London, even while describing the minister’s prediction as bold.