Turkey sticks to IMF targets despite inflation rise

Published December 3rd, 2000 - 02:00 GMT

The state statistics institute announced Sunday that consumer prices in Turkey rose by 43.8 percent in November from a year earlier, while wholesale prices climbed by 39.1 percent in the same period. On a monthly basis, consumer prices rose by 3.7 percent in November from October and wholesale prices were up by 2.4 percent.  


Sunday's figures represent a slight decrease from the rate in October, when consumer price increases stood at 44.4 percent and wholesale price increases at 41.4. Inflation has been declining since Ankara launched a comprehensive program of economic reforms under a three-year, four-billion-dollar stand-by deal with the International Monetary Fund (IMF). 


But Turkey's financial authorities say that it is now difficult for Ankara to reach its year-end target of 25 percent in consumer prices and 20 percent in wholesale prices envisaged under the stand-by agreement. The government, however, is sticking firmly to its end 2001 inflation targets of 12 percent in consumer prices and 10 percent in wholesale prices. 


Last month, the IMF's Turkey desk chief, Carlo Cottarelli, warned during a mission to Ankara that the government should closely monitor inflation because it had remained above the target set in its anti-inflation program. 


IMF officials were back in Ankara Sunday for talks aimed at releasing additional funds to Turkey to overcome a severe liquidity squeeze that has rocked the country's money markets and sucked millions of billions of dollars out of the central bank's foreign reserves.  


Turkey's gross national product (GNP) rose by 6.9 percent in the third quarter of 2000 compared to the figure for the same period last year, the state statistics institute said on Thursday. The figures were issued against a background of high tension in Turkish financial markets owing to a liquidity squeeze. 


There have been reports of heavy injections of emergency funds into the economy by the central bank, and of a request to the International Monetary Fund (IMF) and World Bank to bring forward existing lines of credit. 


The statistics institute said in a statement that the increase in GNP in the first nine months of the year from the figure for the same period in 1999 stood at 5.4 percent. The growth rate for the first quarter of 2000 was 4.1 percent and 4.6 for the second quarter of the year. The institute also said that it had revised the 1999 year-end growth rate from minus 6.4 percent to minus 6.1 percent. 


Thursday's figure constitutes a recovery from the massive contraction the Turkish economy suffered due to lingering effect of the Russian financial crisis and the burden of two devastating earthquakes in the heavily industrialized northwest. The Turkish treasury expects the growth rate to reach seven percent at the end of the year. — (AFP, Ankara) 


© Agence France Presse 2000

© 2000 Mena Report (www.menareport.com)

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