BUSİNESS Economy

Turkey announces incentives to boost employment

The Turkish government has decided to provide incentives to export- and production-oriented industries to boost employment, support the industries and revive growth in the coronavirus-hit economy, President Recep Tayyip Erdoğan said late Tuesday.

Speaking after a cabinet meeting, Erdoğan announced, Employment Shield, a detailed economic support package that will specifically ensure the employment of young people under 25.

Earlier on Friday, Treasury and Finance Minister Berat Albayrak said the government was working on a comprehensive package to support jobs.

Erdoğan added that the country will support the real economy and industries to revive export-oriented growth.

He said the government will support employers who put employees on the short work allowance program or had to make layoffs due to the decrease in economic activities.

Under the allowance to bail out firms amid the coronavirus lockdown, the government pays 60% of staff salaries for three months within the ranges of TL 1,752 ($257.74) to TL 4,381.

Ankara also pays a daily allowance of TL 39.24 for three months to workers forced to take unpaid leave.

“Despite our losses in April, the leading indicators of May show that our economy is in a rapid recovery,” Erdoğan further stressed, noting, “We are determined to support this positive process by keeping inflation down to the levels we target.”

“We aim to gradually reduce the inflation, which was 8.5% in 2020, to 6% in 2021 and below 5% in 2022,” Erdoğan said.

Inflation was a pressing issue for the economy after it surged to a 15-year high of above 25% in October 2018, but briefly touched single digits last fall thanks largely to a base effect and tight monetary policy. It has since edged up, remaining at around 12% in the past months.

Erdoğan said thanks to the period in which inflation has declined and uncertainties in the markets have been replaced by confidence while significant achievements have been made in macroeconomic indicators, the country has implemented a comprehensive package of measures against the coronavirus impact on the economy.

“We supported our companies, tradesmen and citizens without the need for outside assistance and the support of any international institution,” Erdoğan said.

The government has also responded to every request instantly and put into use, Erdoğan said, giving the examples of recently announced credit packages by the state lenders.

Last week, Turkey’s three largest state lenders Ziraat Bank, VakıfBank and Halkbank and two of their participation banks Ziraat Katılım and Vakıf Katılım announced in a joint declaration that they were launching four loan packages, including mortgages for new houses and loans for vehicle purchases, locally manufactured goods and holiday expenses, with annual interest rates running below inflation.

Erdoğan went on to say that Turkey has stepped in to strengthen national and domestic production in recent years, the TL 20 billion worth investment incentive credit announced recently being one of them.

Turkey has entered the normalization process in an economically strong position, Erdoğan said the country will strengthen its place in the post-pandemic world economy with advantages in production, trade and logistics.

The economy posted one of the fastest expansion rates among its peers in the first quarter of 2020, propelled by a surge in consumption that occurred just before a lockdown, to stem the spread of the coronavirus pandemic, was put in place.

The country’s gross domestic product (GDP) grew 4.5% year-on-year in the January-March period, according to the Turkish Statistical Institute (TurkStat), after the economy showed a growth rate of 6% in the last quarter and nearly 1% in 2019 as a whole.

Compared with the fourth quarter of 2019, the economy expanded at a seasonally and calendar-adjusted 0.6%, TurkStat data showed.

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