WASHINGTON/ANKARA - In a meeting with the International Monetary Fund (IMF) President Rodrigo Rato, State Minister Ali Babacan has said that "when inflation and interest rates are at a normal level, the budget balance will receive utmost attention."
During the meeting with President Rato, Babacan also stated that "they have fulfilled their promises made prior to 2002 election, regarding the economy." Babacan discussed various issues with Rato, including tax reform, social security reform, banking, budget and financial discipline.
In reference to budget deficit, Babacan explained that "the percentage of budget deficit compared to the Gross Domestic Product (GDP) will roll back to 8.5 per cent at the end of this year, 7 per cent next year and 3-4 per cent in 2007.
"Turkey's budget deficit will be identical to that of Germany and France," commented Babacan.
According to Minister Babacan, two issues will be on top of the Turkish economic agenda: Tax Reform and Budget. "We expect Turkey to grow by 5 per cent annually within the next three years," added Babacan.
While meeting with Babacan, IMF President Rato stressed that they are pleased with the progress being made in Turkey. On the other hand in a private meeting with Babacan, the World Bank President James Wolfensohn told him that "if the European Union makes a decision against Turkey, it will be a big mistake."
Responding to a question from IMF Vice-President Anne Krueger about the new Turkish Lira and the adaptation period, Babacan stated "that it will take one year."
(ULG) 08.10.2004