The speakers of the panel organized within the scope of the Uludağ Economy Summit, which has been organized by Capital, Ekonomist and Start Up magazines since 2012, were Prof. Bilkent University, Department of Economics, Central Banking and Financial Markets Professor. Dr. Ali Hakan Kara, HSBC Global Chief Economist Janet Henry, University of Missouri FA Hayek Professor of Economic History Prof. Max Gillman and the Economist were former Greek Finance Minister Yanis Varoufakis.
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Janet Henry: There is a ‘rollercoaster’ effect in terms of interest rates in the USA
Speaking at the panel, HSBC Global Chief Economist Janet Henry said, “There has been growth and resilience in the economy in the USA for the last two years. We still do not foresee a recession in the USA. The USA continues to grow and inflation is decreasing. These bring investment expenditures back to the USA. “Consumer spending increased with the decline in inflation in 2020, and this decline also helped the housing market. But we think that this will be an extended cycle, and the situation of the global economy in 2025 seems to be similar to 2024.” she said.
Stating that there is a complete ‘rollercoaster’ effect in terms of interest rates in the USA, Henry said, “Uncertainty seems to continue in the coming months.” he said.
Yanis Varoufakis: We couldn’t say ‘Euro was a mistake’
Economist and former Greek Finance Minister Yanis Varoufakis noted that the European Union (EU) is based on a German business model and does not have a stabilizing feature. Explaining that the EU finances a state that is as bad as Greece, Varoufakis said: “We made a series of mistakes, each worse than the other. For example; We couldn’t say ‘Euro was a mistake’. “Greece’s debt, which was 290 billion dollars during the 2009-2010 crisis, has increased to 400 billion dollars today,” he said.
Prof. Dr. Hakan Kara: Monetary policy should be left alone
Bilkent University, Department of Economics, Central Banking and Financial Markets Professor. Dr. Ali Hakan Kara also said, “There is a global economic conjuncture that is difficult to predict and where there are many uncertainties. Things are happening that I have never seen in the US economy in my career. Six interest rate cuts were predicted in the US at the beginning of this year. However, interest rates in the US seem to remain high for a long time.” “In an environment of high indebtedness, high interest rates negatively affect the indebtedness situation. The fact that Turkey’s household and public indebtedness is not very high is an advantage at this point.” he said.
Noting that the applicability of the MTP is very critical, Kara continued as follows:
“Because Turkey has a very important potential in this region. During the period between the May 2023-March 2024 elections, the entire burden was on monetary policy. The CBRT is doing its part, albeit delayed. I think monetary policy should now be left alone; fiscal policy, public sector improvements and holistic focus should be on policies.
On the fiscal policy side; It is necessary to spread the tax to the base, prevent informality, and most importantly, implement public savings and reform public administration. The insufficient public savings and the lack of trust in this regard constitute a very important reason why investor confidence cannot be achieved as desired.
Under the heading of ‘institutional reforms’, securing the term of office of the CBRT Governor is an important issue. Providing this coverage can immediately reduce your risk premium by at least 50 basis points. “Again, the public distrust in measuring inflation needs to be eliminated and confidence must be restored.”
Gillman: Interest rates in Turkey should exceed inflation
Professor of Economic History at the University of Missouri FA Hayek. Max Gillman also said, “The interest rate in Turkey needs to be above inflation. Most importantly, Turkey needs to trust and integrate with the western financial system.” he said.
