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The IMF retreited its cautious approach and an official with the Fund said the global environment will be tougher for
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Deppler added Turkey's inflation will be higher than hoped, and the rise in energy and raw material costs will negatively effect the price stability. Turkish consumer prices rose 0.96 percent month-on-month in March, compared with a 0.68 percent forecast, for a year-on-year rise of 9.15 percent.
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The government has a year-end target of 4 percent inflation. The Turkish central bank has less room to maneuvre as growth slowed despite the rise in inflation.
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Turkish economic growth will be below expectations for the next two years, returning to a trend of around 6 percent after 2009, Treasury Undersecretary Ibrahim Canakci said during his speech at the conference.
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He also said growth was seen at 4.5 percent this year, versus the targeted 5.5 percent, and that
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Turkish top economy official, however, sounded more optimistic, underlining the economy is in better shape now. Economy Minister Mehmet Simsek said Turkey is sensitive to shrinking global credit and will be "somewhat" affected by it.
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"But fiscal discipline and strong banks will mitigate the impact, and Turkey will be less affected by the credit crunch thanks to a reduction in the budget deficit, the build-up of reserves and a strong banking system."