Minister: Turkish Q1 growth may not satisfy

Turkeyand’s economic performance in the first quarter of this year might be far from satisfying the markets, the countryand’s top economy official said on Wednesday, while maintaining that the government goal of 4 percent growth in 2015 remains unchanged.
Deputy Prime Minister Ali Babacan, who is responsible for economic policy, said on a televised program on Wednesday evening that gross domestic product (GDP) growth for the first quarter — reports on which are expected to be released on June 10 — could be weaker than last year.
and”We still believe a 4 percent GDP growth goal for the year is a realistic one. andhellip Fiscal and monetary discipline along with a strong banking industry are pillars to such a performance,and” Babacan added. Turkeyand’s growth has receded, slipping to 2.9 percent last year from more than 4 percent in 2013. This poor performance is accompanied by stubbornly high unemployment and worrying levels of household debt.
Babacan has long been seen as an anchor of investor confidence in Turkey and has led economic policy for much of the ruling Justice and Development Partyand’s (AK Party) 13 years in power. He is now prevented from standing for re-election, however, because of the partyand’s three-term limit but there are rumors that he will stay on in at least an aisory role to Prime Minister Ahmet Davutoilu if the AK Party forms the next government.
Babacan declined to comment on these rumors during his statements on Wednesday.
h2Banks anticipate steep devaluation in lira ahead of pollsh2
International banks have predicted a significant dive in the value of the Turkish lira leading up to the countryand’s June 7 general elections, according to a report from Bloomberg online news portal.
The French lender Credit Agricole anticipates the Turkish currency to drop to as much as 2.74 to the dollar from its current level of around 2.64. The lira had previously dipped to 2.70 in March before rebounding to 2.57 and then again slipping against the greenback.
A Credit Agricole strategist told Bloomberg that the bank is expecting the lira to continue to drop amid the uncertainties surrounding the upcoming elections.
A report from ING bank indicated that the soon to be released American unemployment figures — set to come out on June 5, two days before the election in Turkey — are likely to result in a spike of the dollarand’s value against the lira.
Meanwhile, according to a strategist from the Societe Generale bank, the uncertainty surrounding the elections will bode negatively for the lira in the short term, while fears surrounding the impact of the upcoming Federal Reserve rate hike will also be detrimental to the liraand’s performance.

SOURCE: Today’s Zaman