World Economy

Turkey Opposition Criticize New Economic Plan

Turkey Opposition Criticize  New Economic PlanTurkey Opposition Criticize  New Economic Plan

Turkey opposition party leaders and prominent business leaders have criticized the ruling Justice and Development Party’s (AK Party) medium-term economic plan, which was unveiled Thursday by Deputy Prime Minister Ali Babacan, alleging that it is flawed and unrealistic.

 Opposition Nationalist Movement Party (MHP) deputy Ahmet Tanrakulu said in a statement on Thursday that the expectations and targets laid out in the plan are likely to be revised in the future, just as previous economic forecasts made by the government were altered in the newly released plan, TodayZaman reported Friday.

“The AK Party’s economic illusions and lies have come to an end,” said Tanrikulu, harshly criticizing the plan, adding, “We have become a nation that has fallen under geopolitical risk due to the government’s failure at management, and as a result foreign investors have lost trust and begun to withdraw their investments.”

The government had expected inflation to be 5 percent this year, but it was nearly double that in August, rising to 9.54 percent before dropping to 8.86 percent in September. Babacan said the government’s revised forecast for 2014 was 9.4 percent, adding that he expected inflation to fall to 6.3 percent next year, and further to 5 percent in 2016.

Babacan revised Turkey’s 2014 growth target from 4 percent to 3.3 percent and reduced its 2015 forecast from 5 percent to 4 percent, saying the government expects to see growth rates of 5 percent in 2016 and 2017.

Among the targets of the medium-term economic plan specified by Babacan was increasing the ratio of tourism to total national income to 6.4 percent between 2015 and 2017 and steadily increasing tourism revenues from $29.5 billion in 2014 to $35.5 billion in 2017.

However, according to recent figures from the Mediterranean Union of Hotel Owners (AKTOB), tourism’s percentage of national income is only likely to move up from 3.4 percent to 3.7 percent in that period.

Ankara Chamber of Industry (ATO) President Nurettin Ozdebir said in a statement on Thursday that the targets put forth in the plan reflect fear and intimidation and do not reflect the true potential of the Turkish economy. “If these barriers were not put in place, Turkey could easily achieve an annual growth of 7-8 percent,” said Ozdebir.

Opposition Republican People’s Party (CHP) deputy Umut Oran took the report to task, saying that incoming economic figures are likely to bring additional surprises. “Even reaching 3.3 percent growth for the year is optimistic. There is also a major possibility that inflation and unemployment may hit double digits,” said Oran.

Istanbul Chamber of Commerce (ITO) President Ibrahim Caglar said on Thursday that he did not find growth targets of 4 or 5 percent sufficient, and that without significant growth, the country is moving away from its 2023 economic targets step by step. “Our economy requires the formation of an innovative production infrastructure,” said Caglar.