Babacan stresses economic reforms to fight crisis

Economy Minister Ali Babacan on Saturday underlined the importance of structural reforms for overcoming the global economic crisis. At a meeting of European business leaders meeting in Helsinki, Finland, Babacan said that the structural reforms Turkey has made since 2002 have done much to minimize the crisis' impact on the country's economy. Turkey's first quarter gross domestic product (GDP) was down year-on-year, and unemployment was up 4 percent, Babacan said. He said Turkey had been particularly affected by a steep slump in foreign demand and international capital inflow. "Our government's structural reforms aim to increase the role of the private sector, and the effectiveness of the financial sector, and to place the country's social security system on stronger ground," Babacan said. He added that the reforms offer the banking industry a cushion from foreign market shocks. "The Turkish banking industry is relatively stronger thanks to effective risk management practices," he said, adding that robust fiscal discipline has helped reduce public borrowing.