TÜSİAD YIK Chairman Aras: Steps Taken in Monetary Policy Are Incomplete Without Supporting Structural Reforms

Forex - Ömer Aras, Chairman of TÜSİAD High Advisory Council, stated that the steps taken in the right direction in monetary policy remain insufficient if not supported by structural reforms. In his opening speech at the TÜSİAD High Advisory Council meeting, Aras pointed out that the economic program has yielded positive results since July, stating, "Thanks to the current monetary policy, inflation has begun to decline. As we have emphasized before, this is a time-consuming process. For the process to be successful, consistency and stability in policies are crucial. We must be patient." Aras continued: "The current account deficit, which is one of the highest signaling indicators of the Turkish economy, is narrowing rapidly. The fact that the annual current account deficit fell below 10 billion dollars in September is encouraging in terms of upcoming inflation and exchange rate developments. As the current account deficit narrows, foreign exchange reserves are also strengthening. The improvement in the economy has been confirmed by international markets. Our country risk premium, as shown by CDS and our rating scores, has improved. However, the inflow of direct capital investments, which will make the greatest contribution to growth through efficiency, is very limited. For direct capital investments, a strong rule of law, and a fair, fast, and effectively functioning justice system must be established alongside macroeconomic stability. Steps taken in the right direction in monetary policy remain incomplete if not supported by structural reforms." -Minimum Wage Trap- "If the increase in the minimum wage, considered appropriate for fighting inflation in an economy, does not satisfy workers, it indicates that there is a serious efficiency problem that needs to be resolved in that country," said Aras, emphasizing that if the underlying issue of low efficiency is not addressed, the minimum wage debate will never end. Aras stated: "The real success lies in creating high-efficiency companies to reduce the number of people working for the minimum wage in the total workforce. It is neither possible to abandon the fight against inflation nor acceptable to lay the burden of this fight on the citizens. Therefore, along with the increase in the minimum wage, policies for increasing efficiency must be brought to the agenda without delay."