Overview of the world and Turkish economy from economists at UEZ2024 – Video Gallery

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, FA Hayek Professor of Economic History at the University of Missouri. Max Gillman and the Economist were former Greek Finance Minister Yanis Varoufakis.

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 that changing geopolitical situations cause pessimism and therefore caution should be taken. Henry used the following statements:
“Europe is in a stable period. Some things were weak in the second part of last year. Despite everything, we see growth in some economies. 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, inflation These also bring investment expenditures back to the USA. Consumer spending increased with the decline in inflation in the USA, and this decrease also helped the housing market. But we think that this will be an extended cycle in 2025. stands.” 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. In his speech, Max Gillman stated that inflation spread globally after the Covid-19 crisis and said, “So many countries entered a spending crisis while struggling with Covid-19. There was also an earthquake in Turkey in February. “This brought with it some financial needs,” he said.

Recalling that the USA increased the money supply dramatically after the terrorist attack in 2001, Gillman said, “The aim was actually to prevent the collapse of the global financial sector. But they continued to increase this for 3 years. Interest rates also started to decline. When you increase the money supply, interest rates But when inflation occurs, the interest rate must be in line with the inflation rate for 3 years, in 2002-2004. Then they said let’s increase the interest rates at 1 percent for 3 years. “This crisis occurred in 2008 when all these interest rates increased suddenly.” said.

Gillman stated that the interest rate in Turkey should be above inflation and said, “Most importantly, Turkey should trust and integrate with the western financial system.” he said.