It’s inevitable for Turkey’s economic administration to make a deal with the International Monetary Fund (IMF) in 2019, nationalist newspaper Sözcü reported on Sunday.
According to Sözcü, the only way for the international markets to trust Turkey again is to make an agreement with the IMF.
“There are three problems ahead of us. The first one is inflation. It is difficult to return to single digits soon. Secondly, the company bankruptcy is at the doors,” Sözcü quoted prominent economist Atilla Yeşilada as saying. (Mr Atilla Yesilada is editor of corporate news and a columnist for PA Intelligence)
“The government cancelled bankruptcy protection since an independent auditor’s report is requested and the procedure is very long. Big companies have been economically restructured, small and medium-sized enterprises will go bankrupt compulsorily,” Yeşilada added.
The banking system has also set alarm bells ringing. Banks cannot give credit since cash flow is very limited due to lack of bank savings. Thus, new investments are cramped. Banks cannot give loans and there is a sharp increase in the number of unpaid credit debts as well.
“There will be a loss of 300-350 billion lira ($60 million) due to implemented bankruptcy protections and unpaid credit debts. Turkey cannot run into debt for this amount. That’s why an agreement with the IMF is compulsory,” the economist said.
President Recep Tayyip Erdoğan decides everything from court decisions to raiding onion warehouses, and with an agreement with the IMF, a legal and institutional operation can come back, according to Sözcü.
In parallel with the Turkish government’s plans to curb soaring inflation by preventing hoarding and what it calls speculative pricing, financial police raided warehouses in different parts of the country suspected of stockpiling onions and potatoes.
Turkey has been trying to reassure investors rattled by the crash of the Turkish lira, insisting the country would emerge stronger and has no need for an IMF bailout.
Finance Minister Berat Albayrak, the son-in-law of Erdoğan, rejected any idea of seeking a bailout from the IMF, an option never seen as likely given Erdoğan has always proudly boasted of paying off Turkey’s past IMF debts in May 2013.
Reprinted with permission from Ahval News, please visit the website