Turkey unveils reform package to revive growth

ISTANBUL: Turkey's government on Wednesday said it would increase support for state banks, bring in measures to curb inflation and overhaul taxes as part of reforms aimed at tackling an economic slowdown.

Turkey slipped into recession for the first time in a decade last year following a sharp currency crisis that sent inflation soaring into double digits and hit Turkish households hard.

Turkish companies, who enjoyed a boom in foreign credit during the country's growth years, have also been hurt as a weaker lira left them burdened with higher foreign debt payments.

Finance Minister Berat Albayrak announced the reform package days after the ruling AKP lost the capital Ankara and Istanbul in a tight local election where high living costs and the slowdown were key voter concerns.

Worried over fiscal policy under President Recep Tayyip Erdogan, investors were also watching Wednesday's announcement to gauge whether Turkey would take the long-term measures for growth and restore credibility.

"Without any elections for the next four years, economic reforms will top our agenda," said Albayrak, who is also Erdogan's son-in-law.

"Strengthening state-run lenders' capital structure will be our first step," he said.

He said the government will issue 28 billion lira ($4.9 billion) in domestic securities to bolster state banks while private banks will also get support.

Albayak said structural reforms in agriculture will target high food prices, and the package includes tax adjustments, pension reforms and loans to strategic sectors.

Erdogan has said his government would focus on strengthening the economy with no elections scheduled until 2023 presidential and legislative ballots.