PM:IMF should not pressure Turkey

Bloomberg

The IMF should understand economic conditions in the country, Erdoğan told reporters at Ankara’s Esenboğa airport yesterday, before flying to the World Economic Forum in Davos, Switzerland.

"If the IMF keeps on coming to us with new issues and asks about things that we’ve already responded to, our" concerns over the process will increase, Erdoğan said.

Turkey and the IMF took a break in negotiations on a new lending accord, raising concern about delays to an arrangement that they have been discussing since May. Turkey needs IMF support to help bridge a gap in external financing and minimize the impact of the global slowdown. Talks will resume in 10 days, Erdoğan said Tuesday.

Erdoğan said he may meet with IMF First Deputy Managing Director John Lipsky in Davos, provided progress is made in meetings between Economy Minister Mehmet Şimşek and the fund’s senior management.

Şimşek briefed the Cabinet on progress in the IMF talks on Jan. 26, after which the two sides announced a pause in the negotiations.

Gap in financing

Central Bank Governor Durmuş Yılmaz on Jan. 25 estimated the country’s foreign financing gap this year at about $30 billion. The IMF loan may be between $15 billion and $16 billion, according to a claim by Zaman newspaper yesterday.

Turkey owes the fund about $8.3 billion from loans made under previous support agreements, according to information on the IMF’s Web site.The IMF is demanding that Turkey widen cuts in this year’s budget to 6 billion Turkish Liras ($3.7 billion) from the current 3.6 billion liras, increase sales taxes and reduce this year’s growth target to 1.5 percent from 4 percent, said Zaman.