Greece’s manufacturing sector contracted again in March, with the purchasing managers index (PMI) dropping to a new record low of 38.2 from February’s 38.9 reading, a monthly survey of manufacturers showed yesterday. Operating conditions in Greece’s manufacturing economy worsened rapidly for the seventh month in a row in March, with further steep falls in output, new orders and employment. The 50-point mark separates contraction from growth. Markit data showed a steep drop in incoming new business, with the retrenchment in new orders more pronounced in the domestic market. “Backlog depletion picked up to a series record pace in March, providing some support to activity levels. However, it was not enough to totally offset the contraction in new work. Excess capacity led manufacturers to streamline their work forces over the month and thus cut costs,” Markit said. “Input purchases by Greek manufacturers were severely reduced in March as production requirements fell,” it said. (Reuters)

ANKARA (AP) – Turkey’s prime minister rejected yesterday a key condition for a possible loan from the International Monetary Fund, which insists that the country apply a strict tax auditing measure. Recep Tayyip Erdogan said his government was opposed to an IMF condition that would introduce an auditing method to check for consistency between individuals’ wealth and their expenditure. The government opposes the measure fearing it would lead to a flight of capital from Turkey. “I regard this as a threat particularly to cash flow for the markets,” Erdogan told reporters before heading to the Group of 20 summit in London. “It is not possible for us to sign such a thing.” An official close to the talks with the IMF said Turkey also had reservations on some other IMF conditions, including revisions to key macroeconomic projections for 2009.

Emerging Europe will have a “severe and abrupt” recession this year due to the trade and financial shocks it suffered as a result of the global credit crisis, Fitch Ratings said. The region’s gross domestic product will shrink by 3.1 percent, the steepest drop since the early 1990s, the ratings company said in a report published in London yesterday. The contraction compares with GDP growth of 4 percent last year and an average rate of 6.8 percent in the five years through 2007, Fitch said. The global credit drought, which has left banks with more than $2 trillion in losses and writedowns, is taking its toll on emerging markets by cutting access to credit and investment. Central and Eastern European economies are the most vulnerable to the worst global recession since World War II, World Bank President Robert Zoellick said yesterday. (Bloomberg)

Turkish exports fell 35 percent year-on-year in March to $7.13 billion, the Turkish Exporters Association (TIM) said yesterday, exacerbating fears of a recession in export-dependent Turkey. The TIM figures come almost a month ahead of official data, which they tend to match. (Reuters)