Government, IMF near to a solution, Bağış says

Bloomberg

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"We have sincere intentions to make a deal with the IMF, but it should be a worked out solution and I think we’re approaching a solution," Bağış told the European Policy Centre in Brussels on Thursday.

Turkey and the IMF have been discussing a possible loan accord of between $20 billion and $40 billion for more than a year. Progress has stalled since an IMF technical team’s last visit to the country in January amid disagreement over government spending.

Close ties

Bağış "is not included in the IMF talks, but given his closeness to Prime Minister Recep Tayyip Erdoğan, this remark cannot be disregarded," Yarkın Cebeci, an economist at JPMorgan Chase in Istanbul, said in an e-mailed report to investors. "We can say that there is clearly some momentum in the talks."

Turkey and the IMF have "a great convergence of views about the near- and medium-term challenges facing Turkey," IMF First Deputy Managing Director John Lipsky said during a visit to the country on June 19. The two sides will hold further discussions in Ankara and Washington, he said.

The Justice and Development Party, or AKP, government has baulked at IMF demands to make budget savings as it seeks to stimulate an economy that contracted 6.2 percent in the fourth quarter. Turkey’s gross domestic product may shrink 5.9 percent this year, the Organization for Economic Cooperation and Development said in a report Wednesday.

"IMF programs have helped Turkey achieve fiscal discipline and financial stability," Bağış said. "We have had a fruitful relationship with the IMF in the past; we have had our ups and downs."