The World Bank is committed to accompany Türkiye in the implementation of policies to help stabilize the economy, according to the bank's country director.
"In addition to our ongoing $17 billion program, over the next three years we anticipate preparing and presenting new operations to the World Bank Group’s Board for $18 billion," Humberto Lopez said in an interview with Anadolu.
This amount includes direct lending to the government as well as support to the private sector, he explained.
The package, with tentative total financing of around $35 billion when all financing instruments are considered, “responds to the strong commitment shown, and more importantly, the actions taken, by the administration to restore macroeconomic stability," Lopez stressed.
The bank will continue its involvement in the priority areas such as climate change as being a very present challenge evidenced by the record temperatures this summer, he said.
World Bank Türkiye is planning to deepen its involvement in some other areas such as the export sector, Lopez added.
Praising Türkiye's economic performance over the last two decades, he highlighted that persistent inflation, an overvalued exchange rate, and fiscal pressures emerging from the spending needs associated with the devastating earthquakes this February put this track record at risk.
"In this regard, we believe that the monetary policy tightening being implemented by the Central Bank, the unwinding of distortive financial regulations, and the fiscal revenue measures to curtail the fiscal deficit being pursued by the Ministry of Finance are steps in the right direction," he said.
The remarks came on the heels of Wednesday’s unveiling of the government’s medium-term economic program, aiming for an average 4.5% GDP growth in 2024-2026, joining high-income countries with an economic size exceeding $1.3 trillion, and using monetary, fiscal, and income policies to eliminate structural factors that lead to high inflation.
Lopez stressed the importance of combating inflation to ensure long-term growth.
According to the latest data from the country's statistical authority, Türkiye's annual inflation reached 58.94% in August.
In 2022, Türkiye's economy grew 5.5% year-on-year, according to revised TurkStat data.
On Türkiye's recently announced three-year roadmap, Lopez said the medium-term program gives a broad view of the policies that will underlie the government’s macroeconomic stabilization efforts.
"But I also think that over the coming weeks and months, the government will need to also bring specificity to some of the measures described," he said, adding:
"From the World Bank Group’s point of view the only thing I can add is that we are ready to support the Government efforts with the implementation of the structural agenda."