Turkey Financial News

Posted by meb at October 19th, 2009

The central administration budget for 2010, which focuses on overcoming the economic crisis, was submitted for Parliament’s approval on Saturday and includes no specific reference to a potential stand-by deal with the International Monetary Fund (IMF).

Disclosing the details of the new budget at a press conference on Saturday, Finance Minister Mehmet Şimşek said Turkey had prepared its budget while taking into consideration its own needs and the conditions arising from the economic crisis, underlining that talks with the IMF would “proceed on the premises set out in the budget.”

The size of the 2010 budget is TL 286.93 billion. It includes a 5.06 percent wage increase for civil servants, in two equal semiannual installments of 2.5 percent. With expected revenue of TL 236.8 billion, the deficit will be approximately TL 50 billion.

According to experts, Finance Ministry bureaucrats maintained caution while drafting the budget. The economic gloom in Turkey will persist next year, and the government will stick to its policy of fiscal discipline, they note. (more…)

Posted by meb at October 19th, 2009

The European Bank for Reconstruction and Development, or EBRD, which has been withdrawing gradually from Central European countries, plans to prioritize Turkey.

EBRD is the first international finance corporation, among many others, to revise Turkey’s economic growth in a positive direction.

The bank had published a report estimating Turkey’s 2010 growth to be 1 percent. The bank has revised that outlook to 3 percent.

The economies of eastern and southern Europe including Turkey, will experience an economic contraction this year, however, signs of recovery will begin next year, said the EBRD.

Turkey’s economy will contract nearly 6 percent in 2009, however that contraction rate is still well above contraction expected in other countries in the region. (more…)

Posted by meb at October 5th, 2009

If Turkey continues to pursue sound economic policies, its economy could perform better than current estimates, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn said on Sunday.

Strauss-Kahn, who is currently in İstanbul to attend the 2009 Annual Meetings of the World Bank Group and the International Monetary Fund, noted that he expected the Turkish economy to recover rapidly from the ongoing global economic crisis, saying that the Turkish economy has made great progress thanks to reforms previously implemented in the financial sector. As a member of the G-20, which forms the backbone of the global economy, he said, Turkey is not only one of the leading economies of the world, but also a dynamic member of the IMF.

According to the fund’s latest World Economic Outlook, released last week, Turkey’s economy is expected to grow 3.7 percent in 2010, after a global recession caused the country’s economy to contract an estimated 6.5 percent this year. The inflation rate in the country is expected to stand at 6.2 percent this year before increasing to 6.8 percent in 2010. The report estimated that Turkey’s current account deficit to gross domestic product (GDP) ratio would increase from 1.9 percent this year to 3.7 percent in 2010. Furthermore, Turkey’s quota in the IMF is expected to increase to more than 1 percent. Analysts note that the Turkish economy will be the fastest growing in Europe in 2010. (more…)

Posted by meb at October 5th, 2009

Turkey does not ‘technically’ need a standby agreement with the International Monetary Fund, according to Professor Nouriel Roubini, who was among the first to predict the current global crisis. But, he says, a deal would give confidence to investors. ‘Instead of just waiting for a recovery in the European Union, Turkey should also diversify its export markets,’ he says

The collapse in European Union demand coupled with receding foreign capital inflows makes a standby agreement with the International Monetary Fund desirable for Turkey, according to New York University Professor Nouriel Roubini.

Roubini, who predicted the crippling financial crisis as early as 2006, told a crowded audience in Istanbul that a global recovery will probably be U-shaped – slow and with low growth rates for years. Speaking at an İş Investment-sponsored event Friday evening, the economist, dubbed “Dr. Doom,” said unprecedented central bank interventions helped mitigate the “systemic risk” to the world economy but that downside risks remain.

“The Turkish economy was fundamentally sound in the eve of the crisis,” he said. “But then the contagion came, resulting in a collapse in European Union demand [for Turkish goods]. The corporate sector halted capital expenditure investments. Turkey is a very open economy and its recovery depends on the recovery of the eurozone.” (more…)

Posted by meb at October 3rd, 2009

Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), put to rest yesterday speculation that an IMF agreement would be signed with Turkey on the sidelines of the İstanbul summit, during a press conference when he answered reporters’ questions about the status of the ongoing relations with the fund.

“We discussed with [Economy Minister Ali] Babacan that it would be inappropriate to discuss [a new standby agreement] during the meetings,” he said, noting that negotiations would resume after the summit. He said they would use the annual meetings to hold multilateral meetings and work out the larger issues of the day and not use them for bilateral meetings.

Strauss-Kahn also challenged the common belief that the IMF was actively pursuing Turkey for an agreement. “We help countries that want our help,” he said, adding that “the IMF is not a bank; we are not looking for customers.” (more…)

Posted by meb at October 2nd, 2009

Dominique Strauss-Kahn was in for a nasty surprise as he gave a lecture to students at Istanbul’s Bilgi University. One protester hurled a shoe at the IMF chief and another one tried to unfurl a banner. Both were detained. Answering questions from students, Strauss-Kahn says the IMF ‘will be there when Turkey wants it to be’

Dominique Strauss-Kahn, head of the International Monetary Fund, was greeted by a shoe-thrower during his speech to students at Istanbul’s Bilgi University on Thursday. The shoe missed the IMF chief and hit a student who was asking Strauss-Kahn a question.

The protester, Selçuk Özbek, was detained for a couple of hours and then released. He was working at the socialist Birgün newspaper, according to local media. After the incident, Zeynep Çatalkaya, a student, tried to open a banner but was stopped by security forces.

As the protesters were taken out of the venue, another group protested the IMF and the government by shouting slogans such as, “Go away IMF,” “IMF is the thief, AKP is the collaborator.”

On its Web site, Birgün newspaper published the story with the headline, “IMF beat it!” (more…)

Posted by meb at October 2nd, 2009

Turkey does not have to sign a new loan deal with the International Monetary Fund, Mehmet Büyükekşi, president of the Turkish Exporters’ Assembly, tells reporters at a meeting to disclose Turkey’s September export figures. The country’s exports dropped 30.5 percent to nearly $8.39 billion for the year as of September, according to TİM data

Signing a new deal with the International Monetary Fund is not a must for Turkey’s recovery process, said Turkish Exporters’ Assembly, or TİM, President Mehmet Büyükekşi during a press conference held to announce the country’s export figures.

Turkey’s export figures dropped 30.53 percent to nearly $8.39 billion in September compared to the same period last year, Büyükekşi announced Thursday in Uşak, a city in the interior part of the Aegean region. The nine-month export total declined by 32.67 percent to $68.896 billion, Büyükekşi said. The country’s year-on-year export slipped 28.89 percent to $94.283 billion. However, the country’s exports increased 9.36 percent in September from a month earlier. (more…)

Posted by meb at October 2nd, 2009

Turkey’s Central Bank said its monetary policy committee has discussed slowing the pace of an 11-month series of cuts to the benchmark interest rate.

The bank isn’t convinced by signs of economic recovery and decided to maintain its easing bias, it said in an e-mail statement of the minutes of the Sept. 17 meeting in Ankara.

Still, there’s a growing belief that the worst of the crisis has passed and “it’s appropriate to adopt a flexible policy and consider the possibility of slowing the reductions,” it said.

The bank lowered the benchmark rate by half a percentage point to a record 7.25 percent at the meeting, taking total reductions over the last 11 months to 9.5 percent, the biggest of any G-20 nation. Gross domestic product is likely to contract 6.5 percent this year, according to International Monetary Fund forecasts announced Thursday. (more…)