ECONOMY

In Brief

Serb Q1 GDP seen as contracting by 5-7 pct BELGRADE (Reuters) – Serbia’s gross domestic product (GDP) will contract by 5 to 7 percent in the first quarter of 2009, the central bank governor said yesterday, as the bank cut its key policy rate by 100 basis points to 14 percent. «[A] year-on-year fall in industrial output and falling global and domestic demand as well as sinking liquidity are leading us to expect that economic activity in the first quarter contracted by 5 to 7 percent,» central bank Governor Radovan Jelasic said at a press conference. The rate cut decision came amid government calls for cheaper dinar loans to prop up economic activity and ensure new jobs. The decision appeared to have been widely expected by the market, with banks citing the central bank’s invitation to a repo auction earlier in the day without specifying the rate. IMF warns Bulgarian economy is shrinking SOFIA (Reuters) – The Bulgarian economy will shrink this year and next and the government must curb spending to cope with the global crisis and avoid slipping into a deficit, the International Monetary Fund (IMF) said yesterday. The IMF, ending a weeklong mission in Sofia, said falling industrial output and sales indicated the East European country was already shrinking and forecast a contraction of 3.5 percent this year and 1 percent in 2010. The IMF repeated its warning that the EU newcomer’s 2009 budget was far from tight, despite aiming for a surplus of 3 percent of GDP, and the government had to curb spending. «Without spending cuts [the budget] could result in a deficit of 1 percent of GDP,» IMF mission chief Bas Bakker told a news conference. Visitors to Turkey The number of foreign visitors to Turkey fell 7.47 percent year-on-year in March to 1.2 million, the Culture and Tourism Ministry said yesterday, in a sign the global economic crisis is hitting the industry. In February, the number of tourists, an important source of foreign currency for Turkey, had risen 0.27 percent from a year earlier to 898,927 people. However March’s steep fall means the total number of tourists to visit Turkey in the first quarter declined 4.22 percent on the year. (Reuters) Pipeline protest Dozens of people from a Bulgarian Black Sea town protested against the planned construction of a trans-Balkan oil pipeline yesterday, concerned about the environmental damage it may cause. About 100 people from coastal Pomorie rallied in front of the Construction Ministry in Sofia to press the government to abandon the project, due to carry Russian oil to Greece, because they expect it to harm seawater, tourism and the local economy. (Reuters) Turk loan talks Turkey’s Economy Minister Mehmet Simsek is flying to Washington today for negotiations with the International Monetary Fund (IMF) on a loan accord, the Turkish Treasury said yesterday. Simsek will meet IMF Managing Director Dominique Strauss-Kahn and First Deputy Managing Director John Lipsky, the statement said, after loan talks were suspended in January over fiscal reform demanded by the IMF. (Reuters)