Erdoğan slams business group over call to 'return to rules of economic science'

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President and Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan has once again defended his low interest rate policies, dismissing his critics.

Speaking yesterday (December 19) at an award ceremony in İstanbul, Erdoğan responded to the Turkish Industry and Business Association (TÜSİAD), which called for a "return to the generally accepted rules of the science of economy" a couple of days ago.

"Hey TÜSİAD and its offspring... I'm calling out to you. You have only one duty: investment, production, employment and growth," the president remarked. "First, show what you are doing in this. Do not look for different ways to attack the government. You can't fight us."

"Don't expect anything else from us," Erdoğan said, referring to the lower interest rate policies. "As a Muslim, I will continue to do what the Nas [a section in the Quran] requires. This is the verdict."

"Of course, we know the problems that price increases cause in the daily lives of our people. But we will resist them just as we resist tutelage, terrorist organizations and putschists," Erdoğan remarked.

Support for Erdoğan

After Erdoğan's speech, the Independent Industrialists and Businessmen Association (MÜSİAD) announced support for the president.

"We regret to see that an artificial environment of insecurity without macroeconomic basis is tried to be created," the group said in a statement on Twitter.

Announcing support for low interest rate policies, it said, "The economy of Turkey, has grown by 11.7 percent in the first three quarters of the year, whose exports have exceeded 220 billion dollars in the last 12 months, and which has posted a current account surplus in the last three months, cannot be reduced to foreign exchange rates.

"Against all manipulations of perception, both internal and external, the economy of Turkey stands firm today as it did in the past. We have full confidence that our economy, which has achieved a growth rate of 5.3 percent in the last 20 years without compromising free market conditions, will overcome this period."

What TÜSİAD said

Releasing a written statement on Saturday, TÜSİAD said it had become clear that the government's new economic program would not be able to achieve the intended results.

The new model based on lower interest rates caused "an environment of insecurity and instability," said TÜSİAD, calling on the government to "return to the generally accepted rules of the science of economy."

TÜSİAD's statement came after main opposition Republican People's Party (CHP) called on business group to stand up against Erdoğan's economic policies.

Erdoğan's model

President Erdoğan says the Turkish lira has become a "competitive currency" with the new economic model, which he says will increase the country's exports.

The Central Bank lowered the interest rates four months in a row since September, which led to a 50 percent depreciation in the Turkish lira.

Erdoğan is known for his theory that higher interest rates cause higher inflation. (TP/VK)