Turkey is freezing new government investment projects, President Tayyip Erdogan said on Friday, to rein in spending and stem double-digit inflation after a 15-year construction boom fuelled by debt.
His comments, a day after the central bank hiked interest rates by a mammoth 6.25 percentage points, mark the clearest signal yet that the government may suspend some of the big-ticket bridges, ports and railway projects that have typified Turkey’s transformation under Erdogan.
But it remains to be seen if the move, like the central bank’s greater-than-expected tightening, will be enough to mollify investors, who have helped send the lira down by 40 percent against the dollar this year.
Financial markets have long been concerned about Erdogan’s control over monetary policy, which they say has undermined the central bank’s ability to fight inflation, now at 18 percent. He has described himself as an “enemy of interest rates”.
“We are not considering any fresh investments right now,” Erdogan said in a speech on Friday. “There could be extraordinary and must-do investments, that’s another issue, but apart from this, we will start looking (at investments)”.
Projects that are more than 70 percent complete will be finished, he added, but “all our ministries will be reviewing the investment stocks they have and will conduct their work by prioritising.”
In a decade and a half in power, Erdogan and his government have built bridges, power plants and hospitals and improved the lives of millions of lower-income, pious Turks. But some of his more ambitious mega-projects have drawn a backlash for their excessive cost and their impact on the environment.
Istanbul’s third airport is due to be one of the largest in the world when it opens in October.
Erdogan has also announced plans for a 45-kilometer canal that would turn the western side of Istanbul into an island and is estimated to cost around $16 billion.
The president did not say whether the canal would be among the projects frozen.
نستخدم ملفات الكوكيز لنسهل عليك استخدام مواقعنا الإلكترونية ونكيف المحتوى والإعلانات وفقا لمتطلباتك واحتياجاتك الخاصة، لتوفير ميزات وسائل التواصل الاجتماعية ولتحليل حركة المرور لدينا...اعرف أكثر