Gray list comment by OECD Chief Economist Pereira

On July 1, Pereira, who took over as chief economist at the OECD, answered the questions of the AA correspondent regarding the decision of the Financial Action Task Force (FATF) within the OECD to remove Turkey from the gray list and the possible effects of this development on the Turkish economy.

Evaluating FATF’s decision to remove Turkey from the gray list as “very good news”, Pereira said that this decision confirms that Turkey has strengthened its anti-money laundering regime to fulfill its international commitments.

“Turkey’s removal from the gray list could further boost international markets’ confidence in Turkey, which has been improving in recent months,” Pereira said, noting that Turkey’s 5-year credit risk premium (CDS) has fallen and international credit rating agencies have upgraded the sovereign rating.

Pereira pointed out that Turkey’s net international reserves excluding swaps turned positive for the first time since the beginning of 2020 as of June, adding, “Of course, being removed from the FATF list is only one step to significantly improve foreign direct investment inflows.”

Noting that despite the positive developments in the Turkish economy in recent months, significant challenges remain, Pereira said that capital inflows have increased in recent months, but the increase in foreign direct investments has remained more limited.

Noting that inflation is still high, Pereira said, “In order to take full advantage of the improved international perception, the authorities should continue with macroeconomic stabilization policies. A stable and predictable policy framework, coupled with a stable macroeconomic environment, has the potential to significantly boost international investment inflows.”