Turkey revises growth forecast down for 2002

ANKARA (AFP) – Turkey, gripped by an economic crisis, has revised its 2002 growth projections down to 4 percent from 5 percent, Finance Minister Sumer Oral announced here yesterday. Oral disclosed the new forecast as he presented plans for a budget deficit in the new year. In 2001, the economy, hit by two financial crises and then devaluation at the beginning of the year, is expected to contract by 8 percent, according to a recent statement by Economy Minister Kemal Dervis. Oral told lawmakers yesterday that the government would stick to an austerity policy within the framework of a reform program developed in conjunction with the International Monetary Fund. Consumer prices are slated to rise 35 percent next year, he said. Inflation at the consumer level had already surpassed a target of 60 percent this year to reach 61.8 percent at the end of September. Oral said the government also foresaw a trade deficit next year, with exports coming to 32 billion dollars (34.5 billion euros) and imports to 45.5 billion dollars. Nearly half – 26.5 billion dollars – of the 60.5 billion dollars in 2002 budgetary spending will go to pay off interest on the public debt. Revenues are predicted to reach 43.8 billion dollars, leaving a deficit of 16.7 billion. Turkey has been grappling with economic turmoil since February. After the government abandoned a fixed exchange rate, the lira fell by more than 50 percent against the dollar. An earlier anti-inflation program hammered out with the IMF had to be scrapped.