ANKARA – Turkish Prime Minister Abdullah Gul sought to reassure jittery markets that his government remained committed to IMF-backed reforms yesterday, announcing plans for $3.7 billion in extra revenues to keep the budget on track. Gul said his government was working hard on preparing a budget for 2003 and would not be distracted from economic issues by the prospect of looming war in neighboring Iraq. He announced sharp rises in cigarette and alcohol prices and promised more steps to raise a total of 6,200 trillion lira in revenues to offset a pension rise announced last week. «We place importance on fiscal discipline,» Gul told reporters after a Cabinet meeting. «We will make sure that the 6.5 percent primary surplus target (for 2003) is met,» Gul said. Turkey aims for growth of 5 percent in 2003 and has pledged to run a primary surplus, which excludes debt payments, of 6.5 percent of gross national product in order to be able to service a heavy debt load swollen by the 2001 crisis. Financial markets have grown nervous about a lack of progress in reforms under a $16 billion IMF program aimed at overcoming a devastating 2001 financial crisis. But Gul said his new government elected in November was working hard. «This seems to me a preliminary announcement saying, ‘We are aware of the problems and we’re working on them,’ and that’s what matters,» said Hakan Avci, strategist at Global Securities, welcoming Gul’s statement. The stock market and the lira edged higher after Gul’s statement. The main share index added around 2 percentage points to morning gains closing 4.19 percent higher at 10,161.21 points. The lira also firmed to 1,672,000 to the dollar from around 1,681,000 earlier in the day. The prime minister said the 2003 budget would be sent to Parliament within a month and «ambitious» privatization plans to raise revenue would be announced by the end of the week. Both are central to hopes of winning the next $1.6 billion payment from the IMF loan pact. Gul’s Justice and Development Party (AK) came to power pledging commitment to the IMF program but the latest review of the pact linked to a $1.6-billion payment has yet to be completed, as some of the conditions have not been met. IMF First Deputy Managing Director Anne Krueger will come to Ankara on January 16 to meet senior economic officials ahead of a visit by an IMF mission. Investors worry the AK is dragging its feet on economic reforms and that a recent pledge to spend $1.8 billion on raising pensions for around 6 million people could upset budgetary balances foreseen under the IMF pact. The uncertainty has led to selling on Turkey’s financial markets in recent days. Debt yields have risen sharply and the treasury struggled to sell domestic debt on Tuesday.