Although globalization is the process of countries occurring more open to foreign trade and investment, it can bring adverse affect in the economy. The differences in living standards among countries the present are the result of many decades of rapidly distinctive rates of economic growth. The relationships among income, consumption and saving play a crucial role in the economy. In particular, falling levels of production and income rate can provide basis for economic problem in the societies.
Which way does Turkish government pursue for economic stability measures?
Many persons can buy goods and services credit cards, yet credit cards are not included in the definitions of the money supply. The reason is that when you decide to buy something via a credit card, you are in influence taking out a loan from the bank which issued the credit card. Nowadays, credit card usage is controversial topic in Turkey because Turkish government commences new regulations about restriction of credit card use and prepares restrictive banking regulations through banking regulation and supervision agency. As a result of this, there should be reliable and consumer protection in the society.
According to Banking Regulation and Supervision Agency, there are significant reconstructions about bank credit cards. One of them is that in regard to article 26, with credit card purchases which cash withdrawals of goods and services will not exceed nine months of the payment period. During this period, electrical and electronic equipment with computer purchases, car rentals, telecommunication and goldsmith have transactions for six months and also white goods and furniture purchases are twelve months, yet there are no implementations for food and fuel purchases with credit card payment. Another one is that draft regulation influence deeply on vehicle and consumer loan because this draft imposes restriction for loans. Hence, government focuses on the importance of the consumption and how people alter consumption habit over credit cards through the draft regulations.
Turkey has low saving rates among countries and the main reason is that increasing rate of import and consumption. In addition to this, Turkey’s current account deficit registered at $48.9 billion in 2012, data released by the Central Bank. As a result of this, Turkish government intervenes in credit card use. New regulations implicate installment in the different kinds of sectors and assist how people use credit card on their spending, so this regulation enable them to learn budget control. In the long run, debts which rise in size relative to GDP can pose a problem. Moreover, Turkish government focuses on another new regulation about get a bank loan because the reason is the similar and try to stabilize Turkish economy. It is not hard to take on loan from bank and people get into debt. Hence, this disturbs huge impact the relationship between demand and supply because government provide for balanced budget.
Turkey has a fragile economy and Turkish government need to enact a new regulations about economic. Two important regulations which are credit card use and loan contracted have positive impact on government’s budget deficit and have tendency to secure people’s lives.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.