ECONOMY

Turkish bank upbeat

ANKARA (Reuters) – The Turkish central bank said yesterday it remained upbeat on Turkey meeting IMF-backed targets for the end of the year despite recent political instability that has sparked losses in financial markets in recent weeks. The lira has approached record lows and yields on benchmark Treasury debt have risen to as high as 75 percent since Prime Minister Bulent Ecevit fell ill in early May sparking fears of a political vacuum in the crisis-hit country. Investors fear Ecevit’s continuing absence from normal duties could deepen divisions among reformist and conservative wings of the three-way governing coalition, leading to early elections and threatening a $16-billion IMF recovery plan. «Along with the lessening of political uncertainty that emerged in the second half of May, it is predicted that market expectations will continue their positive trend,» the central bank said in a statement on its website. «Within this framework, the central bank’s future outlook remains positive,» it said. The central bank targets year-end growth of 3 percent after gross national product (GNP) shrunk by more than 9 percent in 2001. The bank also aims to lower annual year-end consumer inflation to 35 percent from 46.2 percent in May. Tzellas told Reuters the agreement would be signed in Paris in the first two weeks of July. «We will create joint ventures (for) water supply, sewerage and biological waste treatment,» he said.