Turkey's government will maintain fiscal discipline to lower the ratio of net government debt to gross domestic product in 2008 and in the coming years, Economy Minister Mehmet Simsek said on Tuesday. Simsek said Turkey's net government debt to GDP ratio was 29 percent in 2007, versus 47 percent in benchmark emerging market Brazil.
The global financial crisis has hit Turkish markets hard with stocks down 42 percent since the start of the year and the lira at a 13-month low on Monday. But Simsek said Turkey was still attractive for medium- and long-term investment despite the ongoing financial turmoil. He did not give further details.
"The government debt is no longer a source of concern ... We revealed a medium-term financial roadmap in May and we will maintain the fiscal discipline to lower the debt ratio this year and in coming years. A lessening of (our) determination is out of question," he said.
Simsek said Turkish banks were healthy, the banking sector woes were not specific to Turkey and its insurance sector has a strong capital structure. "Turkish banks are profitable and they have made profits including this year. Their return on equity was 25 percent last year," he said. The ratio of non-performing loans to total loans was only around 0.5 percent in the first half of 2008, he said.