The government has postponed talks with the IMF this month because it wants parliament to pass tax and social security reforms first, State Economy Minister Gunes Taner said on 11 February.

A government team was due to fly to Washington during the month to discuss its economic policies, notably its plans to reduce inflation to an annual 50 per cent by the end of 1998. Annual wholesale inflation currently stands at 92.5 per cent.

'At the moment, there's nothing to discuss with the IMF,' Taner told Turkish television. 'We're going to proceed according to the progress in parliament.' Parliament is expected to approve a draft tax law in the next few days, but laws reforming the social security system - in particular, raising the retirement age for government employees - may take longer in the face of opposition from leftist MPs and trade unions. The tax law is intended to reduce tax evasion by giving code numbers to individuals, and will also impose capital gains tax on lira-denominated financial instruments.

IMF backing for the reforms should improve Turkey's credit standing and cut its international borrowing costs. The 92.5 per cent figure for January inflation is higher than expected, but a senior treasury official insisted on Turkish television that the government's inflation-cutting programme was still on target. Treasury under-secretary Yener Dincmen blamed the overshoot on bad weather which had pushed up farm product prices.