Adil Pelister Comments on "Economic Stability Shield Package"

Istanbul Chemical Substances and Products Exporters Association (İKMİB) Board Chairman Adil Pelister issued a written assessment regarding the Economic Stability Shield package announced by Republic of Turkey President Recep Tayyip Erdoğan following the Coronavirus Response Coordination Meeting.

Pelister stated the following in his assessment:

"We are facing a global health crisis affecting the entire world. In recent times, particularly as the coronavirus outbreak has severely impacted European countries, nations are taking a series of measures in response. In our country as well, our government and relevant Ministries are taking every precaution and measure to minimize risks, both for our health and to limit the effects of the virus on the economy. We find it very appropriate that Mr. President announced and will implement a support package worth TRY 100 billion under the Economic Stability Shield framework. In particular, providing our companies that will face cash flow disruptions and credit repayment difficulties with support to defer their bank credit principal and interest payments for a minimum of 3 months, and providing additional financing support where necessary, will relieve our export companies financially and prevent damage to their creditworthiness and records. Providing inventory financing support to exporters to maintain capacity utilization rates during the temporary slowdown in exports, increasing the Credit Guarantee Fund limit from TRY 25 billion to TRY 50 billion, and continuing minimum wage support to reduce labour costs are very important measures that will support our companies' financial strength and meet their cash requirements.

Beyond these, we expect the package to provide deferment options for SSK, VAT and summary tax payments to the chemical sector, which directly or indirectly touches the sectors mentioned in the package by producing raw materials, semi-finished products and goods.

Providing facilitation for Eximbank credits alongside rediscount credits is of great importance for our exporters. It is also very important that the liquidity facilities granted to banks to enable them to provide easier and larger amounts of credit to businesses be converted into actual credit to manufacturers at the same pace. However, the Central Bank of the Republic of Turkey's decision to reduce the policy rate by 100 basis points, bringing it down from 10.75 percent to 9.75 percent, and the announcement of the measures package was a satisfactory development for our business world and exporters during this period. Particularly through rediscount credit arrangements, measures were taken to support the cash flow of our export companies, and through its reduction in required reserves, the door was opened to providing approximately USD 5.1 billion equivalent in foreign currency and gold liquidity to banks meeting real credit growth conditions. Treasury and Finance Minister Berat Albayrak also noted that measures were taken to ensure there would be no disruption whatsoever in markets' access to liquidity in response to the coronavirus outbreak. Under this scope, it was announced that annual income tax returns would have extended deadlines for filing and payment until 30 April. We are going through an extraordinary period in which the world economy is moving into stagnation and global recession is being forecast. From this perspective, while human health always remains our top priority, our goal is to ensure the sustainability of our businesses and to overcome this period with minimal impact. As İKMİB, we are making great effort and care to resolve the financial difficulties our export companies are experiencing during this period and to minimize the effects of coronavirus, and we are regularly consulting with our relevant Ministries and NGOs, expressing our expectations and recommendations. We are closely following every step taken in this regard. As in ethyl alcohol, we are acting with solution-focused objectives. During this period, as the chemical sector, we are ready to do our part. We believe that with the implementation of the decisions taken, we will overcome both the coronavirus and the fragility of the economy. We thank Mr. President and our relevant Ministers and institutions for the support they have provided to us exporters and the business world."