Protectionism biggest risk for world economy: Deputy PM

The biggest risk facing the world economy is protectionism, which caused the Great Depression in 1929 and afterwards World War II, Turkey’s deputy prime minister said on Friday.

“There are some misguided policies leading people to ask if we’re on the verge of some kind of trade war," Mehmet Simsek told the opening ceremony of the 7th Uludag Economy Summit in the northwestern province of Bursa.

Simsek stated that liberality is the key for global economic growth.

"Millions of people came out of poverty and found better health and education opportunities. Global average life expectancy rose," he added.

The world economy is in good shape in the short-term but there are some uncertainties in the medium-term and huge risks in the long-term, he warned.

All countries around the world are growing but usually such synchronized growth does not last long, he added.

"Synchronized growth periods lead to rises in oil prices, inflationary pressures, and tightening monetary policies, which are the largest risks in the short-term," Simsek said.

Highlighting that structural reforms are the way out for global risks, Simsek said advanced and emerging countries are not introducing enough reforms.

Simsek added that investments are stable worldwide so productivity is not rising.

"There cannot be permanent prosperity in a world which does not have rising productivity. There is a downward trend in global productivity," Simsek said.

The two-day summit, organized by the Capital and Ekonomist magazines, is being attended by nearly 1,200 businesspeople from around the world.