Turkey to complete IMF plan, receive $3.6 billion

Economy Minister Mehmet Simsek said Turkey will draw up a five- year economic plan, leading to the conclusion of an International Monetary Fund loan accord and the release of about $3.6 billion.

Turkey to complete IMF plan, receive $3.6 billion
Bloomberg reported Economy Minister Mehmet Simsek said Turkey will soon overhaul its pensions system and draw up a five- year economic plan, leading to the conclusion of an International Monetary Fund loan accord and the release of about $3.6 billion.

Parliament will approve legislation raising the retirement age in the next week or so and the government is putting the finishing touches to a medium-term fiscal plan that aims to cut the ratio of gross debt to economic output to 30 percent by 2012 from about 50 percent now, Simsek said in an interview with Bloomberg Television in Washington on April 12.

Once those steps are completed, there is nothing out there stopping a successful conclusion of the agreement and release of a final loan payment of about $3.6 billion from the fund, he said.

The accord, the country's 19th, will be the second consecutive fund agreement that the ruling Justice and Development Party has concluded. Turkey is discussing a new arrangement and won't be asking for new lending, Simsek said.

Turkey has lots of room for maneuver in its foreign borrowing this year and could go for some time without tapping international markets, Simsek said. While market conditions are obviously more challenging since the global credit crunch, Turkey has not changed its plans to borrow $3.5 billion internationally in the rest of this year, he said.

Revenue expected from state asset sales this year is part of the reason Turkey feels confident it can manage a current-account deficit that hit a record $37.4 billion, or about 5.8 percent of GDP last year.

Still, there's a risk that sales such as an initial public offer of 15 percent of telecoms company Turk Telekomunikasyon AS may not go ahead if market conditions are not supportive, Simsek said.

The medium-term plan will chart out the country's budget and is designed to increase confidence in Turkey by giving investors a clear outline of the government's spending intentions, Simsek said.

Last Mod: 14 Nisan 2008, 17:10
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