Press Release: IMF First Deputy Managing Director Concludes Visit to Ankara

May 7, 2003

Anne Krueger, First Deputy Managing Director of the International Monetary Fund (IMF), met today in Ankara with Prime Minister Tayyip Erdoğan, Deputy Prime Minister Abdüllatif Şener, State Minister Ali Babacan, Finance Minister Kemal Unakitan, Central Bank Governor Süreyya Serdengeçti, BRSA Chaiman Engin Akçakoca, and senior economic officials. The discussions focused on developments under Turkey's IMF-supported economic program and the actions needed to ensure a positive momentum in economic recovery and financial stabilization. Before returning to Washington, DC Ms. Krueger will participate in two conferences in Istanbul tomorrow.

Following today's meetings, Ms. Krueger said:

"I have had very productive meetings with Prime Minister Erdoğan and the members of his economic team.

"The government has reaffirmed its strong commitment to stabilization and economic reform. The government's targets for 2003 of 5 percent growth and 20 percent inflation are within reach, but will require steadfast implementation of the program.

"Prime Minister Erdoğan, his team, and I agree that the rapid end to the hostilities in Iraq and successful conclusion of the Fourth Review of the government's IMF-supported program have improved market confidence and facilitated lower interest rates and a smooth rollover of domestic debt.

"Nevertheless, Turkey's debt burden remains high, and the government needs to achieve further reductions in interest rates. This will require building up policy credibility through a track record of sustained and strict implementation of the agreed program.

"In this regard, we agreed that in the coming weeks the government needs to continue translating its commitments into actions, taking the steps needed to ensure the achievement of the agreed fiscal targets, maintaining the momentum of banking system reform, continuing to enhance the role of the private sector, and improving the business environment.

"I believe that strong policy actions will allow the Turkish economy to realize its vast growth potential, and lay the basis for rapid increases in the living standards of all Turkish citizens, especially the economically disadvantaged. The Prime Minister shares these views.

"An IMF mission will visit Ankara in the second half of May for discussions to complete the fifth review under the Stand-By Arrangement," Ms. Krueger stated.


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