The Turkish parliament has passed the government's 2001 budget planned at 48.3 thousand trillion liras (€79.5 million, $71.6 billion), the Anatolia news agency reported. The budget, in line with Ankara's three-year four billion dollar stand-by deal with the International Monetary Fund, aims to slash inflation to 12 percent in consumer prices and 10 percent in wholesale prices by the end of 2001.
But analysts says Turkey will have to struggle hard to achieve those targets as it is sure to miss its end 2000 targets of 25 percent in consumer prices and 20 percent in wholesale prices. Of the 415 MPs taking part in the vote late on Wednesday in the 550-seat parliament, 315 voted in favor while 136 voted against.
The draft budget, based on a projected growth rate of 4.5 percent, foresees revenues totaling 43.1 thousand trillion liras, including 3.7 thousand trillion liras from privatizations. The budget deficit was forecast at 5.2 thousand trillion liras. The 2000 budget allowed for the expenditure of 46.7 thousand trillion Turkish lira, revenues of 32.5 thousand trillion lira and a deficit of 14.1 thousand trillion lira.
Turkey's Finance Minister Sumer Oral acknowledged last week that the 2000 year-end targets would be reached with a "few months' delay" due to a massive increase in international oil prices and an increase in demand caused by falling interest rates. In November, inflation stood at 43.8 percent in consumer prices and 39.1 percent in wholesale prices.
The draft budget also foresees a pay rise of 10 percent for public sector employees for the first half of 2001, which has been widely opposed by trade unions as "insufficient". The government maintains that it will not let its employees suffer and will make extra funds available if inflation in the second half of next year falls by more than forecast.
The budget is regarded by Turkey's financial authorities as central to its stand-by deal sealed in December 1999 with the aim of overhauling the country's troubled economy. In early December, Turkey turned to the IMF yet again and secured a $10-billion aid package after a severe liquidity squeeze rocked its money markets and threatened to throw the economic program off track.
The package included $7.5 billion (8.5 billion euros) in emergency funds, and another $2.9 billion under an existing four-billion-dollar, three-year standby agreement with the Fund. The Fund's executive board is scheduled to meet Thursday in Washington to discuss the aid package and the release of the first installment of $2.8 billion. — (AFP, Ankara)
© 2000 Mena Report (www.menareport.com)
