“General Outlook of the TRNC Economy” discussed at EUL
Undersecretary of the T.R.N.C State Planning Organization Ödül Muhtaroğlu attended the “General Outlook of the TRNC Economy” themed conference organized by the European University of Lefke (EUL) Faculty of Economic and Administrative Sciences Department of Economy.
Muhtaroğlu: Public domestic debt stock is an important problem
Muhtaroğlu explained the basic macroeconomic indicators of the Northern Cyprus economy, especially considering the change in recent years and made a presentation which attracted the attention of the students and academicians. He said that economic growth has been 4% on average in recent years, but the growth rate of 5.4% in 2017 is quite promising and added that growth which is above 5% is considered as a good growth rate. Muhtaroğlu underlined that the rise in inflation had a negative impact on the economic growth rate of 2018 and caused it to be estimated at 2.6%. He also stated that private sector investments dominate the economy, the share of tourism and trade sectors in the Gross Domestic Product (GDP) is 20% and the total share of the industry sector is 9.7% and the university sector has a significant share on this. Muhtaroğlu further stated that public domestic debt stock is an important problem and said that “Non-public debts cause non-use of resources that can be channeled to the economy and loss of efficiency and this may cause economic growth to be below the required level”.
Muhtaroğlu: Exports need to be increased by determining which products are in demand
Pointing out that the payment of external debt is not urgent, Muhtaroğlu said that as a result of the comparison of the 2018 and 2019 fiscal year budgets, 83 million TL fiscal deficit was estimated in 2018, but the year was closed with 50 million TL, however, a deficit of TL 851 million is foreseen in the 2019 budget. Underlining that in addition to the estimated deficit in 2019, an additional budget of 574 million TL was also accepted, Muhtaroğlu said that trade balance gave a deficit but the current balance gave a surplus due to education and tourism revenues. Pointing out that in 2018, the ratio of exports to imports was 5.5% and in Malta it was 43%, Muhtaroğlu said that we’re doing 48% of our exports to countries outside Turkey, exports need to be increased by determining which products are in demand. Muhtaroğlu said that on the other hand, fuel, vehicle and construction iron were the most important import items and added that the import-dependent economic structure became more expensive due to the depreciation of the Turkish Lira and caused an increase in inflation.
Muhtaroğlu also said that “While deposits increased, the share of TL deposits in 2018 was 40% and foreign currency deposits were 60%”. Muhtaroğlu also made a statement on the other macroeconomic indicator, namely employment, and said that youth unemployment (15-24 years) increased to 22%. He emphasized that the rate of domestic employment in the private sector is generally 50%, but that the share of domestic employment in the tourism sector remains at 20% and added that SPO is also the authorized institution in investment incentives. Muhtaroğlu finally stressed that 24 projects were given incentives in 2018 and that 1.5 billion TL fixed capital investment would come into play with the implementation of these projects.