Brekk: Turkey's Near-term Economic Prospects Have Improved Over The Last Several Weeks

ANKARA - Odd Per Brekk, the senior resident representative of the IMF in Turkey, said on Friday that Turkey's near-term economic prospects had improved over the last weeks.
Making a statement, Brekk recalled, ''over the past ten days, an IMF mission team headed by Mr. Juha Kahkonen has reviewed progress under Turkey's economic program. The IMF supports the program under a stand-by arrangement covering 2002-04. Of total Fund financing of 17.5 billion U.S. dollars, about 3 billion U.S. dollars remain to be disbursed.''
Stressing that Turkey's near-term economic prospects had improved over the last weeks, Brekk said, ''the completion of the fourth program review in April, a rapid end to war in Iraq, and prospects for up to 8.5 billion U.S. dollars in loans from the United States have all helped bolster market confidence, resulting in lower interest rates and a stronger currency. In this more benign environment, the government's macroeconomic targets of 5 percent growth and 20 percent inflation in 2003 remain feasible.''
Noting that the government needed to strictly implement its economic program to allow the favorable trends to continue, Brekk said, ''to reduce Turkey's high debt burden, the government must persist with prudent macroeconomic and reform policies. In this regard, meeting all the program's monetary targets for end-April and passage of direct tax reform legislation in April were welcome steps. However, the fiscal position is under pressure, and structural reform has faced delays in several areas.''
Stressing that the government and the mission had made significant progress on a letter of intent for the fifth review, Brekk said that the authorities needed to take steps to keep the fiscal program on track, and accelerate key structural reforms to bring the review to completion.
''With strong efforts by the authorities, the IMF Executive Board could meet to consider the fifth review before end-June. Completion of the review would trigger a disbursement of about 500 million U.S. dollars,'' Brekk added.
(MS-AY) 30.05.2003