ECONOMY

IMF team starts talks with Turkish private sector representatives

ISTANBUL (Reuters) – An IMF team began talks yesterday with bodies representing various Turkish private sector groups as it launched a review of the country’s $16 billion loan accord with the Fund amid concerns about inflation-busting wage rises. The International Monetary Fund team is expected to focus on how the government will fund a 34 percent hike in the minimum wage and a 21 percent increase in state pensions announced recently. The increases are expected to cost the state budget in total some 3,500 trillion lira ($2.6 billion). In December, annual inflation was 18.4 percent compared with an IMF-backed target of 20 percent. The end-2004 consumer inflation target is 12 percent. Exporters told the IMF team they would face difficulties remaining competitive after the minimum wage increase. «Isn’t there a way to decrease the costs and burdens upon producers in Turkey, which doesn’t stand a chance at growth without a hand from its private sector and exporters, and readjust the terms of (the government’s) fiscal discipline?» Oguz Satici, head of the exporters’ union TIM, said at a meeting with the IMF team in Istanbul. TIM data earlier this month showed exports had jumped 32.4 percent to $47.891 billion in 2003, beating an official target of $45.9 billion. Led by Turkey desk chief Reza Moghadam, the IMF team is due in the capital Ankara later this week. Talks are expected to continue until January 21.