World Bank Thursday said the Turkish economy was heading in the right direction following an overhaul in economic policymaking following the May elections but there was “more to do.”

The lender’s country director Humberto Lopez’s remarks came a week after the bank said it would double its exposure to Türkiye to $35 billion over three years.

Lopez said that of the additional $18 billion in funding, $6 billion was intended for the public sector and the remaining $12 billion was earmarked for the private sector.

Since June, Türkiye’s central bank has hiked its key interest rate by 1,650 basis points in a bid to tackle the country’s long-term inflation problem as the government shifted away from ultra-loose monetary policy.

“There is more to do, but I think that the way they are doing it is the right one,” Lopez told an interview with Reuters in Ankara, adding that inflation may have to rise “in the short run” as a result.

The annual inflation surged to 58.94% over the 12 months ending in August. It had reached a 24-year high of 85.5% last October and stood at 47.83% this July after regressing to as low as 38.21% in June.

The government’s immediate challenge, Lopez said, was calibrating multiple policies while in the longer term, it was boosting productivity.

The World Bank announced its new Türkiye funding plans last week.

Lopez said the $6 billion earmarked over three years for the public sector would focus on renewable energy, flood management, climate change adaptation and mitigation, and support for the export sector.

Libya, Morocco disasters

Among others, Lopez said the World Bank is working with authorities in Morocco and Libya to prepare financing in response to the deadly disasters in the two countries.

“The bank is working with the authorities (on) how to respond to the earthquake. But how you respond depends also on the authorities’ demand,” he noted.

“And I do not know where the conversations with Morocco and Libya are at this moment. I know that the teams are working,” he added.

An earthquake of 6.8 magnitude on Friday killed nearly 3,000 people in Morocco, the deadliest quake to hit North Africa since 1960. In Libya’s east, a torrent resulting from a powerful storm burst dams and killed thousands, with thousands more missing.

Libya has requested international aid to support search and rescue efforts, while Morocco has accepted aid offers from four countries and not taken up offers from some others.