Turkey post Referendum Government committed to Infrastructure Spending
Investors thus far have generally welcomed the result of the referendum, albeit with questions remaining as to how President Erdogan will use his enhanced powers to revive growth in the economy and support the currency. Just 1 week after the the referendum however (Monday), the Turkish Stock Exchange closed at a record high and the Turkish Lira has appreciated by 1.8% against the Dollar.
Speaking in Ankara on Monday, Prime Minister Binali Yıldırım said that much of the focus (to boost economic growth) will be on the reduction of financing costs and redirection of resources for large infrastructure projects.
It is planned that around 100 billion Lira ($28 billion) will be required over the next 10 years for large scale projects in transportation, student accommodation, energy and urban regeneration.
‘Urban regeneration, which includes destroying and rebuilding structures that are currently inadequate will help to drive domestic consumption and employment over the next decade’, he said. He went on to say that much of the funding for these projects will be through partnerships with private investors, from both local and international groups.
He added that ‘large scale projects can not be funded from the public sector because the priorities here are primarily health and education. Previously, the public budget in these areas meant that there was never any surplus for big infrastructure projects – this was the reason that Turkey first turned to public-private partnerships to build-operate-transfer models and the success of these means that we will continue to use this model for the future’.