UPDATE - Turkey announces $4.9B financing for strategic sectors

UPDATES WITH MORE COMMENTS FROM MINISTER; ADDS BACKGROUND

By Gokhan Ergocun and Tuba Sahin

ISTANBUL/ANKARA (AA) - Turkey will provide a 30-billion-Turkish lira ($4.9-billion) financing package for sectors which have export potential but are riddled with foreign trade deficit and high import dependency, the treasury and finance minister said Thursday.

The new finance package named "IVME" (advanced, productive, indigenous, industry) will target sectors which have four main features, Berat Albayrak said.

The package will prioritize medium-high-technology and high-technology products and sectors, the minister underlined, with the provision of raw material, intermediate goods, machinery and agriculture, he added.

"We will adopt a model of prioritizing export based, value-added, technologic product manufacturing," Albayrak said.

The share of medium-high-technology and high-technology products was 31% in Turkey's exports in 2002, it reached 39.9% in 2018 thanks to the country's policies, the minister stated.

He added that Turkey should further increase the share of high technology products on exports which also has key importance in Turkish economy’s structural transformation.

Turkey's production capability and industrial structure will gain strength with the financial package, Albayrak stressed.

- Turkish economy to post current account surplus

"Despite financing conditions getting difficult due to global developments, we ensured that Turkish economy was affected from global commercial and financial uncertainties at a minimum level," he underlined.

Albayrak said Turkey took steps to ease accessing for financing and it will continue to do so, and the package will make possible the cost-effective financing.

"We expect that Turkish economy would post a current account surplus as of June, in a first for the 18-year Justice and Development (AK) Party rule," he highlighted.

Last year, the 12-month-rolling current account surplus reached the highest level with $58 billion on May, and the deficit fell to around $13 billion, he said.

- Worst period of unemployment ‘left behind’

The economic activity slowed in the first quarter, but a recovery period was experienced in the second quarter, according to Albayrak.

Some 500,000 got a job in March and April, the minister said, and added: "This figure will reach over a million in June and July thanks to [revival of] tourism sector, the worst period of unemployment left behind."

Turkey's unemployment rate was 14.7% -- 4.73 million people -- in February, according to a Turkish Statistical Institute (TurkStat) data.

"We will also reach desired point in the field of budget through steps and measures we will take in the second half of this year," he added.

Turkey has overtaken technical recession period by starting from the first quarter, and it will see more improvements in growth during the second half of 2019, he said.

Turkish economy's annual growth rate was 7.4% in the first quarter of 2018, 5.3% in the second quarter, 1.8% in the third quarter, while it narrowed by 3% in the last quarter of 2018, according to a TurkStat data.