Turkish government says economy to contract 3.6 percent in 2009

The Turkish economy is however estimated to grow 3.3 percent in 2010 and 4.5 percent 2011, Ekren also said as he revealed the latest revised figures.

 

The government had forecast 4 percent growth when it announced the budget figures at the start of 2009.

 

Turkey's economy shrank by 6.2 percent in the last quarter of 2008, giving it an overall annual growth rate of 1.1 percent following gains in the first three quarters.

 

The current account deficit, which started to decline due to the global financial crisis, is also expected to register as much as $11 billion in 2009, Ekren said adding that the deficit would reach $18.6 billion in 2010 and 26.4 billion in 2011 as the global economy recovers.

 

The unemployment rate, which hit a record high of 13.6 percent as of December-end, is also forecast to be 13.5 percent during 2009, he also said.

 

There was no revision to inflation targets set by the central bank -- 7.5 percent for 2009, 6.5 percent for 2010, and 5.5 percent for 2011 -- as they were still within reach, Ekren said.
 
Changes in economic program
Ekren also said that the government would make significant changes in the format of the medium-term economic program. "There will be three important components in the new medium-term program, including the assessment of former developments, the update of goals of the new era, and the policies, reforms and strategies to reach these goals," he said.

 

The basic economic indicators of 2010-2012, budget figures and debt dynamics would become apparent in the medium-term program to be made public in May, he added.

 

The minister said that the government had sent the pre-accession economic program, covering the years between 2009 and 2011, to the European Union.

 

The base for IMF deal
Ekren said that the pre-accession program would lay the groundwork of some other future documents, including the medium-term program with the International Monetary Fund, or IMF.
 
Turkey is under increasing pressure to sign a fresh IMF accord amid worsening economic indicators that have strengthened evidence the once-booming economy is heading into recession.
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An IMF spokesperson said last week that Fund officials would soon meet Turkish authorities to resume talks -- suspended since January -- on a stand-by deal.
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Neither the IMF nor Turkish officials have revealed the loan amount, but Turkish newspapers speculated last week that the accord would be signed for three years and could be worth up to $45 billion.

 

Budget deficit to rise $30 billion
Turkish Finance Minister Kemal Unakitan also said the government expects its budget deficit to swell to 48 billion Turkish lira ($30 billion) in 2009, revising its previous target of 10.4 billion lira.

 

The budget deficit is estimated to fall to 39 billion lira next year and inch back up to 40 billion lira in 2011, Unakitan also told at the same conference.

 

The government said on March 20 the budget deficit jumped to 7.39 billion lira in February from a surplus last year.