During a meeting on Monday, Nişantaşı University Rector Kerem Alkin said that the central bank has maintained its own method of dealing with monetary policies over the past four years despite critical statements by several Cabinet ministers.
Speaking at a meeting held by the Association of Turkish Construction Material Producers (İMSAD) on Wednesday, Alkin said the central bank has in the past intervened in the market in different ways as a regulatory body; however, he added, unnecessary disputes rooted in misinformed comments from leaders' advisers over its policies show the ignorance related to the management of the economy.
Underlining that the very recent decision of the bank to cut the country's one-week repo rate by 50 basis points was correct, Alkin noted that even one of the most prudent central banks in the world, the Central Bank of India, which is also an emerging market, has recently lowered its interest rate, a move that implies the world has entered a “worrisome period.”
Mentioning global developments, Alkin stressed that the price of Brent crude per barrel may go up to $60 at the end of the year and is likely to reach $80 in 2017. Alkin also answered a question from Today's Zaman on whether there is a housing bubble in Turkey and said currently there is no data available suggestive of a bubble in the construction sector.
Alkin also said the ministers responsible for the economy, including Deputy Prime Minister Ali Babacan and Finance Minister Mehmet Şimşek, had previously taken an absurd yet proactive measure that would prevent a housing bubble from emerging in the country. Alkin said the government increased the value added tax (KDV) to 18 percent in certain regions where there was a possibility of a bubble; however, he added, the government lowered the KDV down to as low as 1 percent in other regions in order to shift the risk and preserve balance.
Since the meeting was held just a day after Tuesday's interest cuts by the central bank, statements by the speakers and questions leveled by the press were shaped around debates over the bank's decision and developments affecting the world economy.
Dr. Can Fuat Gürlesel, another speaker who is also the economic adviser to İMSAD, shared his views and the association's projections regarding growth and development in the Turkish construction industry. Gürlesel said plummeting global oil prices have weakened the economies of the top countries Turkish construction companies operate in, since their budget revenues are highly dependent on oil sales. Gürlesel highlighted that İMSAD anticipates stable growth for the Turkish economy in 2015, and that the economy is expected to increase its gross domestic product (GDP) by 3 to 3.2 percent. Gürlesel reported that İMSAD expects the Turkish construction sector to grow by 3.5 or 4 percent in 2015.
When asked if the advance of the militant Islamic State in Iraq and the Levant (ISIL) in Syria and Iraq has had any impact on the construction sector in Turkey and on Turkish contractors operating abroad, Gürlesel said ISIL has been a source of instability in neighboring countries; however, he added, the policy of the Turkish government in the region has also triggered discriminatory behavior against Turkish companies at business fairs they attend. Gürlesel noted that turmoil stemming from the ISIL advance will continue affecting the Turkish construction sector in 2015 as well.
The meeting was also attended by the head of İMSAD, Dündar Yetişener, and former Turkish Central Bank Governor Gazi Ercel, who urged the government to make use of dipping global oil prices and contribute to closing the current account deficit.