ECONOMY

IMF team set to visit Turkey for loan review next week

ANKARA (Reuters) – An International Monetary Fund (IMF) team is planning to visit Turkey next week for talks on the fifth performance review of the country’s $10 billion loan program, a Turkish economic official told Reuters. The talks with the IMF team, headed by Turkey desk chief Lorenzo Giorgianni, are expected to focus on issues such as the 2007 budget, inflation and the current account deficit, one of the main weak points in the economy. The official said an exact date for the team’s arrival had not been set, but the talks could begin from the middle of next week. Turkey has recovered from a 2001 financial crisis which triggered a recession. The economy is expected to grow as much as 6 percent this year while inflation has fallen sharply from triple digits in the 1990s. Inflation has however ticked up again this year and is expected to be near double the IMF-backed target of 5 percent. In July, the IMF approved the third and fourth loan reviews and agreed to release a tranche of $1.85 billion under the agreement. The IMF also agreed to waive performance targets related to parliamentary approval of administrative and social security reforms and legislation to reform personal income tax among others. The last IMF review was concluded on May 22, since when Turkish markets have been hit hard by rising inflation and an emerging market sell-off which triggered a slide of as much as 25 percent in the value of the lira against the dollar. Turkey’s three-year standby accord began in 2005 and consists of 10 reviews. One further review is scheduled for this year, three in 2007 and one in 2008.