ANKARA – Turkey’s social security deficit is expected to touch 5 percent of gross national product (GNP) this year, above the 4.5 percent target agreed with the International Monetary Fund, economic officials told Reuters yesterday. The officials, speaking on condition of anonymity, said they were holding talks with the International Monetary Fund. «It looks difficult for the social security deficit to stay at 4.5 percent of GNP in the 2006 budget. But the IMF does not want this limit to be exceeded and it is seeking measures on this issue,» an official said. Turkey allocated 22 billion lira ($16.29 billion) for social security transfers in the 2005 budget, but spent 15.66 billion lira of this in the first eight months. While Turkey plans to restructure its pension system and adopt a more efficient way of collecting social security contributions, the IMF says the country will need extra measures to meet the 4.5 percent/GNP deficit target. The target will be the same in 2006. The government has breached its overall spending target by 2 billion lira and a major part of this is social security expenditure, said the officials. The officials said that the 2 billion lira in excess spending would be financed by unused direct income subsidies and funds from canceled investment projects. «So far there’s no need for a supplementary budget, but a regulation for 500 million lira extra spending may be needed in December due to social security transfers,» said an official. The officials said all funds allocated from the 2005 budget for free health services for the poor had already been spent. Reform A lumbering social security system is one of the Turkish budget’s biggest burdens. The IMF says the deficit is unsustainable and the system must be reformed. Under reforms expected to be passed by Parliament in October, Turkey aims to cut the deficit by merging three state pension schemes and raising the retirement age. The first review of Turkey’s new $10 billion IMF loan deal was suspended in July after Parliament started its summer recess without passing the social security reform, a precondition for completion of the review. Women and men retire at 58 and 60 respectively under the existing system, which analysts say has been burdened by people retiring earlier, and one that is both inefficient and prone to corruption. Previous moves to raise the retirement age sparked popular demonstrations by labor organizations, which say poor working conditions do not permit Turkish workers to stay in their jobs for longer.