Babacan: "If an IMF deal is reached, our mid-term economic program may be adjusted"

Deputy Prime Minister the Economy Minister Ali Babacan said yesterday that talks between Turkey and the International Monetary Fund over a standby agreement are still underway and that some adjustments could be made to the government's medium-term economic program if an agreement is reached. Speaking to a symposium on global investment in New York on the sidelines of the UN General Assembly, Babacan addressed recent economic developments in Turkey. Saying that Turkey and the IMF are closer to a possible a deal than they were a few months ago, he added that negotiations will continue on the basis of the government's recently announced medium-term economic program, which focuses on putting budget balances back on track in 2010-2012. "If we reach an agreement on the details, we could make adjustments to the program," he said. Babacan also said the Turkish economy has started to see signs of recovery from the global economic recession. Despite the positive effects of numerous structural reforms since 2002, he said, economic growth slowed at the end of 2008 due to the global economic crisis. Noting that the recession also continued this year, Babacan added that positive growth is expected to restart by the first quarter of 2010, according to the economic program. "We're expecting Turkey's economy to contract 6 percent this year, but are estimating 3.5 percent growth for 2010," Babacan said. Telling how Turkey is the only Organization for Economic Cooperation and Development (OECD) member that needed no intervention into its banking sector to overcome the effects of the crisis, he added that Turkey's banking system has remained powerful and resilient to global shocks thanks to a number of measures taken in recent years. Babacan also mentioned a government project to turn Istanbul into a regional financial center, and cited the IMF and World Bank annual meeting set to take place there next month.