ECONOMY

Turk growth above targets

ISTANBUL (Reuters) – Turkish gross national product (GNP) growth could be around 10 percent in 2004 in view of the latest economic data, Deputy Prime Minister Abdullatif Sener told a conference in Istanbul yesterday. The official government target for 2004 growth under a $19 billion loan accord with the International Monetary Fund is 5 percent. But the median forecast in a Reuters poll earlier this month showed analysts expect GNP to grow by 8.1 percent. Sener forecast that third-quarter growth could be some 7 percent after GNP rose by 14.4 percent year-on-year in the second quarter and 12.4 percent in the first quarter. «We are looking at industrial production and capacity utilization figures for July and August. This data shows growth in the third quarter will be around 7 percent,» Sener said. «With growth continuing in the fourth quarter, the year-end growth will be around 10 percent,» he said. An IMF team is set to arrive in Turkey tomorrow for key talks on a new standby loan facility, supporting a three-year economic program, to replace the existing deal which expires in February. Turkish economic officials said previously that the IMF could provide the country with $10-$15 billion in new lending. Markets upbeat Turkish markets were in an upbeat mood yesterday on indications that the government would drop a controversial plan to ban adultery. The main Turkish share index rose more than 3 percent to end at a record high and the lira also rose. The index closed 3.06 percent higher at 21,705.34 after the ruling party and main opposition said they had agreed to present key amendments to the penal code as a joint proposal, signaling that the adultery plan would be dropped. Yields on the benchmark February 22, 2005 bond were steady at 24.37 percent from Monday’s 24.36 percent. The lira closed stronger at 1,497,500 to the dollar from 1,500,500. The center-left opposition is opposed to the plan, which has outraged Turkish liberals and women’s groups and has also upset the European Union, which Ankara hopes to join. Turkey’s treasury yesterday sold 1,426 trillion lira ($950 million) of three-month reference bills in an auction at a maximum yield of 20.93 percent, slightly below market forecasts. «We hear conciliatory statements on adultery from the ruling and opposition figures that ease the tension in the markets,» Oyak Investment’s Ahmet Cayiroglu said. The markets gained confidence in the expectation that the government would not include the adultery ban in the new penal code, he added. Turkey’s European Union bid has helped the Istanbul Stock Exchange achieve a new rising momentum, and this would continue to support the index, brokers said. The EU executive will publish a report on October 6 on Turkey’s progress in rights and political reforms. That report will form the basis for EU leaders at a December summit to decide whether and when to open accession talks. «The EU is the fundamental expectation. The market is not reacting to the developments in northern Iraq although they are important because of an optimistic mood,» said Acar Securities Research Director Zeynel Abidin Balci. Turkey has threatened to halt cooperation with Washington in Iraq after a US offensive in northern Iraq and the reported deaths of ethnic Turkoman civilians.