ANKARA - State Minister Ali Babacan said on Saturday that seventh review discussions which had continued in Ankara for two weeks ended late on Friday.
Holding a joint news conference with IMF's Turkey Desk Chief Reza Moghadam, IMF's Representative in Turkey Odd Per Brekk, Central Bank Governor Sureyya Serdengecti and Treasury Undersecretary Ibrahim Canakci, Babacan said that compromise had been reached on outlines of draft letter of intent at the end of discussions.
''After completion of some technical studies soon, we expect the IMF Executive Directors Board to convene in April to finalize the seventh review. Under these review discussions, it has been once again seen and affirmed that all of our macro economic targets in 2004, particularly the growth and inflation rates can be accomplished. Final figures of the primary surplus to which we attach great importance under our economic program will be released at the end of April. However, the current figures show and point that the primary surplus increased over to six percent for the first time in history of the Republic of Turkey,'' he said.
Stressing that they determined to maintain the success they had achieved in budget discipline in 2003 year, Babacan said, ''tax revenues got behind the projections due to increase in minimum wage and pension in 2003 and measures to remove financial deficit caused by the review of 2004 year incomes and relevant projections have become definite. With these measures, our primary surplus target of 6.5 percent of gross national product in 1004 has been assured. As we have said earlier that these measures are seven quadrillion liras comprising 4.4 quadrillion liras of savings measures and 2.6 quadrillion liras of measures to increase revenues. Measures to increase revenues are the prices about fuel oil prices, tobacco products prices and alcoholic drinks. Any increase in price of other products including natural gas, electricity and liquefied natural gas is out of question.''
MOGHADAM: STEPS NEEDED TO STRENGTHEN MACROECONOMIC STABILITY
Moghadam said that it should be backed by structural reform, preserving the advantages and benefits that had been gotten so far to make more progress.
Noting that successes in macro economic field in 2003 had been quite effective on basis of indicators in 2003, Moghadam said that indicators in 2004 were not different from those.
Stating that Turkey's economy had been growing swiftly while the inflation had been decreasing, Moghadam said that the significant success of the government in the primary surplus target had played great role in decrease of interest rates.
Moghadam added that Turkish lira was considered as a currency to hold as a value.
BABACAN: WE DECREASED NUMBER OF REVIEWS FROM FOUR TO THREE
Babacan said, ''there was an opportunity of obtaining nearly two billion U.S. dollars of loan from the IMF and it would be divided into four. However, under this decision, we will obtain nearly six hundred and sixty million dollars tranche of loan after every review.''
Noting that studies on some supplementary tables and figure indicators of the letter of intent were still under way, Babacan said, ''so the document on which we reached compromise is the main frame of the letter of intent. Our relevant officials continue working on the attached tables.''
Babacan said that format of discussions with the IMF in 2005 and later would be determined by the government through mid-2004, adding that there had not been any concrete meeting on the issue and it had not been discussed during the seventh review discussions.
Babacan said that all alternatives were currently at the table but they did not ignore any of them.
''We don't definitely say one of those alternatives can't happen. Turkey is one of the twenty-nine founder members of the IMF. Number of its members has reached one hundred eighty-four. And we do what Turkey's membership requires as long as its membership continues,'' Babacan said.
Babacan stressed that developments which brought burden on the economic program like the Imar Bankasi, acts of terrorism in Istanbul and Iraq war had not caused any deviation from the economic program.
''Thank God, we have reached all our targets in 2003 although such domestic and external shocks happened. The economic policies that our government has been following has concretely proven that the economy has gained a more self-protective structure against domestic and external shocks,'' he said.
MOGHADAM: I AM PLEASED TO REACH COMPROMISE WITH TURKISH OFFICIALS ON DRAFT LETTER OF INTENT THAT SUMMARIZES THE THINGS TO BE DONE IN 2004
Moghadam said that the government was determined to reach the primary surplus target of 6.5 percent of the gross domestic product, adding that the government was also determined in taking necessary measures to reach this target.
Noting that the Banking Law had been reviewed under the structural reforms, Moghadam said that harmony of control and supervision of the banking sector with the EU standards should be increased.
Giving information on policies to be followed regarding the banking sector, Moghadam said that one of the subtitles of it was restructuring of state banks and making progress in privatization schedule.
Moghadam said that recent successes achieved in privatization and increase in role of private sector in the economy was promising for the coming period.
BABACAN: WE TRIED HARD NOT TO INCREASE PRICES OF ESSENTIAL GOODS
Replying to a question, Babacan said, ''we focus on a large package of measures including twenty-twenty five items. We tried hard not to increase essential goods in price. Two-thirds of these measures are savings measures and the remaining measures aim to increase revenues.''
''Under the seventh review, there won't be increase in prices of natural gas, electricity and liquefied natural gas. These are not among the measures to close the seven quadrillion liras of deficit. However, there is a full consensus of opinion that those measures would be enough to close the deficit,'' he said.
IMF delegation headed by Turkey Desk Chief Reza Moghadam had arrived in Turkey on February 26.
The first round of discussions under the seventh review of the stand-by deal with the IMF was completed between January 12-21. The IMF delegation continued holding discussions in Ankara after its meetings in Istanbul on February 27.
Those discussions focused on increase in minimum wage and pension in 2004, meeting the additional source requirement which was caused when the tax incomes in 2003 remained below the expected figure, other elements of the structural reform agenda that will be put into practice in coming period as a part of support to reform studies that have been carried out in field of public finance and banking sector and privatization practices.
(AA) 13.03.2004