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Turkey's economy on slow cook

Tuesday, September 08, 2015 - 01:41

Turkey's new deputy prime minister in charge of the economy says that growth and inflation will miss government targets this year. David Pollard reports.

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Breaking Bad's proving rather good for one Istanbul cafe. The top US TV show's main character is Walter White - his crystal meth-making misadventures are now a theme-based experience. Business is looking up - as are prospects for expansion, says owner Deniz Kosan. (SOUNDBITE) (English) OWNER OF WALTER'S COFFEE ROASTERY, DENIZ KOSAN, SAYING: "We are right now in talks with Dubai, Moscow and also New York which will be in the first quarter of 2016." Turkey's government could do with some chemistry of its own. The new deputy prime minister in charge of the economy says both growth and inflation will miss government targets. Cevdet Yilmaz took office less than two weeks ago - one of his first tasks was to chair the G20 summit. He's pencilling in GDP at 3%. Not bad perhaps - but way off the rates of around three times that Turkey enjoyed a decade ago. Inflation is seen close to seven per cent, two per cent higher than target. It's more pain for the country's lira currency. The conflict with Kurdish militants, its refugee crisis and political uncertainty pinning it down to record lows. IHS Global Insight's Jan Randolf. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: ''That's a problem for them because they still rely on financial foreign inflows to finance some of their deficits, and if they can't get investors on their side, they're going to have to close those deficits and accept lower growth, which is a problem for a government.'' Yilmaz hopes the political situation at least will improve after November elections. Polls suggest they could end in a coalition government. That could mean less decisive policy-making, but also less political tension. No quick fix perhaps, but still something that could prove a hit for investors.

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Turkey's economy on slow cook

Tuesday, September 08, 2015 - 01:41