Apr 15 2019

Turkish Minister Albayrak holds ‘worst IMF-World Bank meeting ever’ - analysis

Turkish Finance Minister Berat Albayrak’s closed-door meeting last week with hundreds of investors as part of the IMF-World Bank meetings in Washington is being labelled by some attendees as the worst they've ever had with a high-ranking government official, Dion Rabouin wrote in U.S. news site Axios.

The Turkish finance minister while addressing investors in Washington D.C. last week attempted to convince participants that Turkey was doing much better than it was in October, when it was emerging from a currency crisis following a diplomatic spat with Washington.

One emerging market fund manager who attended the meeting, however was not authorised to comment on it publicly, told Axios, "I've literally never seen someone from an administration that unprepared" and"It was an absolute shit show."

Albayrak’s unimpressive performance could not have come at a worse time for his country, the article said, noting that investors are growing more anxious as the country heads toward recession and President Recep Tayyip Erdoğan is seeing his popularity erode as witnessed in the March 31 local elections where his party lost five of the country’s most populous cities.

Albayrak announced his latest plan to bring Turkey out of an economic downturn last week, pledging $5 billion in loans to state-run banks and to take some bad loans off banks’ balance sheets. The lira slumped by 28 percent against the dollar in 2018, bringing an economic recession, and is down about 8h percent this year.

Government officials typically gather with investors during the week to lay out their plans to boost economic growth and address any fears of a weakening economy or debt default, the article said, noting however that Albayrak failed on all counts.

The biggest takeaway from the week's events was pessimism about chances for a turnaround in Turkey, Michael Cornelius, an EM portfolio manager at T. Rowe Price, told Axios.

"Not only are the fundamentals not improving, Erdogan is doing worse, investor sentiment is very, very bearish and they still have significant refinancing needs," Cornelius said.