Turkish CEOs say they are pessimistic about future due to economic uncertainty

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Photo by M. B. M. (Unsplash)

Chief executive officers of leading holdings in Turkey have expressed pessimism about the future of their companies due to uncertainty over the Turkish economy, saying that they will cut back on their investments in 2019, the Ahval news website reported on Friday.

The CEOs spoke at a meeting jointly organized by the Capital and Ekonomist business magazines.

Borusan Holding CEO Agah Uğur said there will be problems both in demand and in funding in markets in 2019, adding: “In 2018, we have fallen behind our goals. The fluctuations in the value of the Turkish currency against the US dollar affect this, too. Our biggest problem is our inability to foresee the future.”

The Turkish lira underwent a currency crisis in the first half of this year, losing nearly 30 percent in value against the US dollar. Even though the lira has recouped some of its losses since September, inflation numbers and forecasts have maintained their upward trend.

Uğur said his company expects to curtail investment in the first two quarters of 2019.

“In the energy sector, we have investments in renewable energy valued at $260 million. We have secured the loans necessary for some part of this investment and are trying to find funding for the remainder. We act cautiously in our investments. This is not an easy period. Our budget for this year was $5.2 billion. We planned our budget well, but we remain behind our goals,” he said.

Eczacıbaşı Group CEO Atalay Gümrah, who also spoke at the meeting, said his company had prioritized exports and creating revenue abroad during the time when the Turkish lira experienced significant losses in value against the US dollar, adding that the Eczacıbaşı Group is trying to expand its business to new countries by working with well-known brands.

Anadolu Group CEO Hurşit Zorlu said he thinks there will be either no or little economic growth in 2019 and that the most crucial problem in the economy is an environment of ambiguity.

“In an environment of ambiguity, those who have money do not want to spend it and businesspeople do not want to make investments. So the economic environment is a basic determinant in investment decisions. In an assessment of the first nine months, we recorded growth of 30 percent. When we draft our budget, we will assume that there will either be little or no economic growth in 2019 and only a minor decline in inflation,” he said.

Doğuş Group CEO Hüsnü Akhan said his company expects growth of 3 percent in the Turkish economy, while they expect inflation to be around 25 percent.

Ahmet Dördüncü, the CEO of the Akkök Holding, said as an executive, what worries him the most is his inability to see the future.

“We began to prepare the 2019 budget in September. At that time, we predicted that one US dollar would be valued at T L7 and drafted our budget accordingly,” said Dördüncü.

Last week Turkey’s central bank released an expectation poll for the month of November that it conducted on 70 finance experts, executives and professionals in which the value of the lira against the US dollar is forecast to be 5.64 at the end of the year, a decrease from the 5.99 of a previous poll.

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