Turkey: Economy can resist shock of attacks

ANKARA (AFP) – The Turkish economy, emerging from one its worst-ever recessions, is strong enough to withstand the financial fallout from four bomb attacks in Istanbul, Economy Minister Ali Babacan said yesterday. «The past year proved that the economy is being affected less by internal and external events when compared to previous years. It has become better fortified against shocks,» Babacan said in an interview with the Anatolia news agency. The Istanbul Stock Exchange closed last Thursday following the second set of bombings at the British Consulate and the headquarters of the HSBC banking giant after the national index lost 7.3 percent in just a few minutes. It will reopen on Monday after a nine-day religious holiday. Observers, however, have said the calm reaction of the bond market in Turkey, which remained open last week, showed that investors did not panic. But the attacks, with their toll of 53 dead and images of bloodshed and destruction, may have a serious impact on Turkey’s vital tourism sector, which accounted for one-quarter of Turkish exports and 5 percent of the country’s gross national product in 2002. The bombings struck at a time when the Turkish economy had just begun to recover from a severe financial crisis that dragged the country into a serious recession in 2001. The International Monetary Fund had said that Turkey is well on track to achieving its targets of 20 percent inflation and 5 percent growth this year. Inflation stood at 20.8 percent in October and growth was 3.7 percent in the second quarter of the year. Babacan pledged the government would stick to an IMF-backed program of tight economic policies. «The economy will become even more resilient because we will implement these policies without any concessions,» he said.