TODAY’S ZAMAN – PM halts official gift giving in bid to boost economy

PM halts official gift giving in bid to boost economyPrime Minister Ahmet DavutoIlu said on Thursday his government has dropped a traditional practice of giving gifts such as lavish plates at official events as part of plans to boost the economy and national savings.andldquoWe are suffering serious waste in government spending due to gift giving, and local authorities should drop it from this day forward,andrdquo DavutoIlu told a press conference on Thursday in Ankara He said the government wants to rebalance the economy away from consumption-led growth.

The measure announced by DavutoIlu comes among a series of others that the government announced as part of an eight-step reform package to maintain sustainable growth.DavutoIlu told reporters on Thursday that new measures would raise Turkish gross domestic product (GDP) to $2 trillion by the year 2023.

The package of programs announced on Thursday are aimed at increasing domestic savings to 19 percent of GDP in 2019 from 13.4 percent in 2013, in turn boosting investment in industry, the prime minister said.

The package also involves tackling unregistered economy, boosting higher quality production and turning Istanbul into a global finance centerDavutoIlu also said on Thursday that he sees no risk in the manufacturing sectorand#39s foreign debt in the near term after a recent steep decline in the liraand#39s value. The government sees the economy as sturdy and crisis-resistant and sees no need for additional measures, DavutoIlu added.

The government will employ measures to discourage luxury consumption, Economy Minister Nihat Zeybeki told the same press conference. The measures will be mainly in the form of import tax hikes, especially on consumer electronics, Zeybeki added.

Lira gains on US Fed reassurancesTurkeyand#39s lira gained on Thursday after the US Federal Reserve said it would be patient in raising rates. Fed Chair Janet Yellen told a news conference andquotpatientandquot meant the policy-setting Federal Open Market Committee was unlikely to hike rates for andquotat least a couple of meetings,andquot meaning April of next year at the earliest.

Turkey is especially vulnerable to a US rate hike because it would make Turkeyand#39s current account deficit more expensive to finance. Yield-seeking funds tend to flow out of risky emerging markets.

The lira firmed to 2313 against the dollar on Thursday, rising from 23690 on Wednesday after assurance from Turkeyand#39s central bank governor, Erdem BaII on Wednesday that the bank would keep its monetary policy tight until there was a clear improvement in the inflation outlook.The lira reached 24140 on Tuesday, its weakest ever figure, in an emerging-market slide spurred by a collapsing Russian rouble.

Domestic political tensions amplified the effect on the lira Turkeyand#39s main stock index was up 28 percent at 83,157 points, outperforming the emerging market index which was up 16 percent on Thursday.

SOURCE: Today’s Zaman