Turkish prime minister rejects IMF condition for possible loan deal

Erdogan said his government was opposed to an IMF condition that would introduce an auditing method to check for consistency between individuals’ wealth and their expenditure.

The government opposes the measure fearing it would lead to a flight of capital from Turkey.

"I regard this as a threat particularly to cash flow for the markets," Erdogan told reporters before heading to the Group of 20 summit in London. "It is not possible for us to sign such a thing."

An official close to the talks with the IMF said Turkey also had reservations on some other IMF conditions, including revisions to key macro-economic projections for 2009. He spoke on condition of anonymity because he was not authorized to speak to reporters.

The 2009 budget has an ambitious target of a 27 percent rise in exports and 4 percent growth in gross domestic product - which analysts and business groups say are unrealistic.

Plagued by a current account deficit, Turkey is eyeing a loan of some $25 billion to alleviate the impact of the global economic meltdown, news reports have said. The country has to repay around $50 billion of foreign debt within a year.

Talks with the IMF for a loan deal were suspended in January over unspecified disagreements but the IMF said last month that it had modified "policy and reform proposals" in response to Erdogan’s concerns and that a team was ready to travel to Turkey to resume talks.

However, Erdogan’s remarks indicated that some snags had not been overcome despite calls from the business world to hurry the agreement with the IMF.

Erdogan did not say when the IMF delegation would arrive.