UPDATE - Turkey to focus on structural reform: Treasury minister

UPDATES WITH MORE REMARKS BY TREASURY MINISTER; ADDS DETAILS

By Muhammed Ali Gurtas and Tuba Sahin

ANKARA (AA) - Turkey will focus on structural reforms to achieve the target of becoming greater and more powerful economy, the treasury and finance minister said Wednesday.

"This transformation and reform process will decisively continue in a four-and-a-half-year period with no election," Berat Albayrak said.

Speaking at a news conference to announce the government's action plan, Albayrak said the financial sector prioritized a new set of structural reforms for 2019.

"Strengthening state-run lenders' capital structure will be our first step," he said, adding that the Treasury will issue 28-billion Turkish lira worth (around $5 billion) government debt securities to make state banks' balance sheets robust.

Albayrak said studies in coordination with the banking watchdog and banking association are continuing to support private lenders' capital structure.

The minister noted that a new individual pension system according to citizens' income level will be determined in the upcoming period.

"We give priority to create an effective and healthy saving system, starting from state to individuals, to eliminate fragilities in economy.

"In the next five years, funds accumulated in the new retirement system will exceed 10% of the country's gross domestic product," Albayrak said.

He added that Turkey will also take steps in real sector to ensure healthy working of financial sector.

A total of 50 state/private/foreign lenders -- including deposit banks, participation banks, and development and investment banks -- conducted banking activities in Turkey as of February.

Measuring the health of loans, the ratio of non-performing loans to total cash loans -- the lower the better -- was 4.11% in February, versus 2.92% in the same month last year.

Also touching on consumer prices, Albayrak said the National Unity in Agriculture project will be most important reform to combat food inflation.

"In May, this comprehensive strategy will be unveiled by the Ministry of Agriculture and Forestry," he said.

As of March, Turkey's annual inflation rate was 19.71%, slightly up from 19.67% in February.

Over the last decade, annual inflation saw its lowest level at 3.99% in March 2011, while it peaked at 25.24% in October 2018.

Under Turkey's new economic program announced last September, the country's inflation rate target is 15.9% this year, 9.8% next year, and 6.0% in 2021.

Albayrak also said a greenhouse corporation will be established to work as a balance element in fresh vegetables and fruits market.

"At the first stage, a technologic greenhouse will be built on some 2,000 hectares by this corporation in 2019," he said, aiming to meet 25% of the country's total greenhouse production in the long-run.

Meanwhile, red meat price stability will be supported by “sheep and goat farming move,” Albayrak said.

"Turkey's stock of sheep and goats will reach 100 million within four years thanks to the government incentives.”

According to the official figures, the number of ovine animals surged 4.1% to 46.1 million heads last year.