TURKEY: IMF action awaits next visit

25 April 1997

An IMF Article 4 mission ended two weeks of talks in mid-April on an inconclusive note, effectively postponing a decision on any financial facility by six months. Economic State Minister Ufuk Soylemez and team leader Martin Hardy indicated a medium-term plan was being assembled for Hardy's next visit in six months.

Speaking at a 15 April briefing for EU diplomats in Ankara, Hardy gave mixed signals on his estimation of the economy, diplomatic sources say. Hardy reportedly said economic growth should be curbed from a high of 7.9 per cent expansion of gross national project (GNP) in 1996, and expressed disappointment in the annualised, end-1996 wholesale inflation rate of 84.9 per cent, saying it should have been closer to 70 per cent.

Hardy praised the government's commitment to privatisation, but he criticised as unrealistic three economic packages developed by the government to raise fresh resources, the sources say. He warned that the cash budget deficit, put at the equivalent of about $3,200 million for the first quarter, could work out at about 10 per cent of GNP by the end of 1997.

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