Türkiye set for growth if Middle East becomes key investment hub: Former IMF official

Raghuram Rajan, former Chief Economist of the International Monetary Fund (IMF) and a professor at the University of Chicago, discussed global economic trends and Türkiye’s potential during an interview at the Davos Summit with CNBC-e.

Rajan expressed cautious optimism regarding Türkiye’s economic opportunities amid global uncertainties.

Global uncertainty under Trump’s leadership

Rajan addressed the implications of Donald Trump‘s presidency, noting the uncertainty surrounding U.S. trade policies.

“Trump has created uncertainty. He sees trade deficits as harmful to the U.S. and is considering using tariffs,” Rajan said, adding that markets are wary of high tariffs. “We expect these tariffs to be implemented, which could have significant market implications.”

Challenges for Europe and stabilizing the dollar

Turning to Europe, Rajan observed the continent’s ongoing economic challenges. “European countries are experiencing serious stress. I hope European leaders will implement necessary policy changes to address slow growth,” he remarked.

On currency trends, Rajan noted the recent strength of the U.S. dollar, predicting some stabilization ahead. “The dollar has strengthened significantly and may stabilize soon,” he said.

Türkiye’s strategic position and opportunities

Rajan highlighted Türkiye’s potential as a key economic player, particularly in the context of Middle Eastern investments.

“Türkiye has many opportunities ahead. If the Middle East becomes an attractive investment destination, this could create significant opportunities for Türkiye. We’ll see how this develops,” he stated.

Rajan also commended the effectiveness of interest rate hikes in curbing inflation but noted that inflation remains a challenge globally.