Fund sees faster-expected recovery for Turkey and world

The International Monetary Fund said yesterday that the global economy is recovering faster than expected and estimated a 3.7 percent growth rate for Turkey in 2010, after a global recession caused the country's economy to contract 6.5 percent this year. The fund said in its latest twice-yearly World Economic Outlook, announced in Istanbul ahead of next week's annual meetings of the World Bank Group and IMF, the world economy is poised to grow by 3.1 percent next year, with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 percent in the IMF's previous set of estimates. And for this year, the IMF now projects a 1.1 percent decline in the global GDP instead of the 1.4 percent contraction it predicted in July. Still, the report warned against premature withdrawal of stimulus efforts and said uncertain growth in the developed world could soon put governments in a vise between keeping their stimulus spending going, or cutting it back to avoid ruining their finances with debt and deficits. In related news, Turkey's quota in the IMF is expected to rise to more than 1 percent, giving it the opportunity to get more financial aid at a lower cost under new reforms expected to be high on the agenda of next week's meeting of the Fund in Istanbul, IMF sources were reported as saying. Turkey's ad hoc quota currently stands at about 0.6 percent after it was increased from 0.45 percent in 2006. Another twofold increase is expected to take place next week, raising the quota from 1 to 1.5 percent. The quota increase will allow Turkey to receive more financial aid from the Fund, up to $6 billion, with more flexible conditions. The cost of receiving financial aid will decrease by a quarter. Furthermore, Turkey's influence on IMF policy decisions will also increase since quotas also determine the voting power of the countries.