Press Release: IMF to Begin Discussions on Review of Turkey's Stand-By Arrangement

September 6, 2005

Mr. Hugh Bredenkamp, the IMF Senior Resident Representative in Turkey, issued the following statement on September 5, 2005:

"An IMF mission, headed by Mr. Lorenzo Giorgianni, will visit Turkey September 8-21 to discuss with the authorities progress in implementing their economic program, which is supported under a three-year Stand-By Arrangement.

A previous mission, in June 2005, concluded that Turkey's economic performance was strong and that good progress had been made in meeting the policy targets for the first review under the Stand-By Arrangement. Consideration of this review by the IMF's Executive Board was postponed, however, as the pension reform law could not be approved before Parliament recessed for the summer.1 The authorities expect passage of this important law soon after Parliament reconvenes.

The upcoming mission will take stock of recent economic developments and assess with the authorities the outlook for growth, inflation, and the balance of payments. In light of this assessment, it will discuss the macroeconomic policies needed to achieve program objectives. The discussions will also cover recent progress and next steps on the structural reform agenda. The near-term priorities under the authorities' program include: implementation of the social security and banking reforms, following parliamentary approval; income tax reform; implementation of measures to strengthen tax administration; establishment of a framework for dealing with social security arrears; technical preparations by the Central Bank of Turkey for the launch of formal inflation targeting in January 2006; and continued implementation of the privatization program, including for state banks."

1 See Press Release No. 05/157


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