Turkey to protect state construction contractors from lira’s slump

Turkey’s government will offer construction companies who won state contracts protection against declines in the lira’s value from July until the end of 2021, the Daily Sabah newspaper said.

The government has submitted the proposal to parliament for approval, Daily Sabah reported on Monday.

But the newspaper said construction companies asked on Sunday for the arrangement to be extended to include the lira’s losses for the whole of 2021.

“The implementation of the price difference from January 2021 can at least cover some of the losses,” Erdal Eren, head of the Turkish Contractors Association, said in a statement after attending a meeting of parliament’s planning and budget committee.

Turkey’s lira slumped by 44 percent against the dollar last year, with most of the declines occurring since September, when the central bank decided to start cutting interest rates despite accelerating inflation. The consumer price inflation rate ended the year at 36.1 percent.

Eren said he expected such measures to continue until inflation comes in parallel with a surge in costs for companies. Turkey’s producer price inflation rate accelerated to 79.9 percent in December.

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