{
  "title": "Press Release: IMF Approves US$4 Billion Stand-By Credit for Turkey",
  "publication": "IMF News, December 22, 1999",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9966",
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  "summary": "Real economy (change in %) - Real GNP: 1996: 7.2; 1997: 8.2; 1998: 3.8; Est. 1999: -2.1; Proj. 2000: 5.6; Prog. 2001: 5.2; 2002: 5.8 - Domestic demand: 1996: 10.0; 1997: 7.5; 1998: 0.6; Est. 1999: -2.3; Proj. 2000: 6.5; Prog. 2001: 5.0; 2002: 5.5 - CPI (end-of-period): 1996: 79.8; 1997: 99.1; 1998: ",
  "publishDate": "1999-12-22",
  "sections": [
    {
      "heading": "Approval and Financing",
      "content": "- The IMF approved a three-year Stand-By credit for Turkey equivalent to SDR 2,892 million (about US$ 4 billion) to support the government's 2000-2002 economic program.\n- The first installment, available immediately, is equivalent to SDR 221.7 million (about US$300 million).\n- Turkey joined the IMF on March 11, 1947 and its quota is SDR 964.0 million (about US$1.323 billion).\n- Turkey's outstanding use of IMF financing currently totals SDR 437 million (about US$599 million)."
    },
    {
      "heading": "Executive Board Statement — Key Messages (Stanley Fischer)",
      "content": "- Turkey is embarking on a strong program to:\n  - Free the country from the high inflation that had plagued the economy for two decades.\n  - Restore macroeconomic fundamentals.\n  - Address long-standing structural weaknesses in the economy.\n- Elements emphasized as necessary for success:\n  - Large adjustment in the primary fiscal balance to re-establish fiscal solvency and reduce inflation.\n  - Rigorous implementation of the budget and mobilization of resources through privatization to lower domestic borrowing and support declining interest rates.\n  - A preannounced path of the exchange rate to anchor inflation expectations and reduce interest rates.\n  - An up-front fiscal adjustment, a strong commitment to the exchange rate path, and ambitious structural reforms as safeguards against unsustainable real appreciation.\n  - A pre-announced exit strategy from the exchange rate regime to limit the risk of locking the exchange rate at inappropriate long-term levels.\n  - Comprehensive structural reforms including an ambitious privatization program, major pension reform, and agricultural policy reforms to produce efficiency gains and limit fiscal costs.\n- Implementation of structural measures is described as critical to medium-term fiscal sustainability and to increase economic efficiency and growth."
    },
    {
      "heading": "Program Summary — Objectives and Pillars",
      "content": "- Central ambition: free Turkey from inflation and enhance prospects for growth and a better standard of living.\n- Identified root cause of inflation: weakness of public finances driven by large and sustained primary deficits monetized over decades.\n- The government's program rests on three pillars:\n  - Up-front fiscal adjustment.\n  - Structural reform.\n  - A firm exchange rate commitment supported by consistent income policies.\n- Rationale for each pillar:\n  - Fiscal adjustment: necessary because weak public accounts are the ultimate factor behind high inflation.\n  - Structural reform: needed to make fiscal adjustment sustainable, improve economic efficiency, and facilitate decline of public debt via privatization receipts.\n  - Firm exchange rate commitment and consistent income policies: needed to bring inflation and interest rates down more rapidly, particularly in the first phase of disinflation.\n- Exit strategy: transparent and preannounced exit strategy from the exchange rate regime to avoid long-term rigidities."
    },
    {
      "heading": "Fiscal Strategy and Structural Measures",
      "content": "- Main fiscal goal for 2000:\n  - Raise the primary surplus of the public sector (consolidated central budget, extrabudgetary funds, local government, nonfinancial state enterprises, central bank, and duty losses of state banks) to 2.2% of GNP in 2000 (or 3.7% excluding earthquake-related expenses, which are estimated at about 1½% of GNP).\n- Fiscal policy complements:\n  - More active and diversified debt management policy.\n  - Acceleration of privatization to contain interest payment burden.\n- Structural reforms aims:\n  - Strengthen public finances and improve service provision over the medium term.\n  - Reduce inequalities in the tax burden and waste in public expenditure.\n  - Phase out existing indirect agricultural support policies over a two-to-three year period and replace them with a direct income-support program.\n  - Further disengage the government from economic activity through privatization, raising sizeable receipts for debt reduction, including major operations in telecommunications and energy.\n- Expected outcomes of structural reforms:\n  - Make fiscal adjustment sustainable over the medium term.\n  - Lower the burden of interest payments on public sector debt.\n  - Improve transparency and economic efficiency.\n  - Reduce contingent liabilities of the public sector."
    },
    {
      "heading": "Monetary and Exchange Rate Framework",
      "content": "- Two guiding considerations:\n  - Disinflation and a rapid decline in interest rates require more predictable monetary and exchange rate developments to reduce uncertainty for residents and nonresidents.\n  - To avoid long-run rigidities, the program calls for a transparent and preannounced exit strategy from the exchange rate regime."
    },
    {
      "heading": "Macroeconomic Projections and Key Indicators",
      "content": "- 2000 macroeconomic projections and goals:\n  - Real GNP growth in 2000 is expected to be 5-5 ½%, with an expected rebound from negative growth in 1999.\n  - CPI inflation is projected at 25%, compared to about 65% in 1999.\n  - External current account balance is projected at -1.8% of GNP, against -0.5% in 1999.\n- Selected historical and projected indicators (as presented):\n\nReal economy (change in %)\n- Real GNP: 1996: 7.2; 1997: 8.2; 1998: 3.8; Est. 1999: -2.1; Proj. 2000: 5.6; Prog. 2001: 5.2; 2002: 5.8\n- Domestic demand: 1996: 10.0; 1997: 7.5; 1998: 0.6; Est. 1999: -2.3; Proj. 2000: 6.5; Prog. 2001: 5.0; 2002: 5.5\n- CPI (end-of-period): 1996: 79.8; 1997: 99.1; 1998: 69.7; Est. 1999: 65.4; Proj. 2000: 25.0; Prog. 2001: 12.0; 2002: 7.0\n- Unemployment rate (in %): 1996: 6.0; 1997: 6.4; 1998: 5.9; 1999: ...\n- Gross national saving 1/ 2/: 1996: 18.9; 1997: 20.8; 1998: 23.2; Est. 1999: 20.0; Proj. 2000: 20.4; Prog. 2001: 19.5\n- Gross domestic investment 1/ 2/: 1996: 23.4; 1997: 24.6; 1998: 23.9; Est. 1999: 22.8; Proj. 2000: 24.4; Prog. 2001: 23.3\n\nPublic finance (in % of GNP)\n- Central government Primary balance: 1996: 1.2; 1997: -0.2; 1998: 3.6; Est. 1999: 0.9; Proj. 2000: 3.9; Prog. 2001: 5.3\n- Central government Overall balance: 1996: -8.4; 1997: -7.6; 1998: -7.7; Est. 1999: -12.1; Proj. 2000: -12.6; Prog. 2001: -6.0; 2002: -2.2\n- Central government debt: 1996: 48.0; 1997: 48.4; 1998: 48.5; Est. 1999: 60.5; Proj. 2000: 60.1; Prog. 2001: 58.8; 2002: 57.0\n- Consolidated public sector Primary balance: 1996: -1.2; 1997: 0.5; 1998: -2.7; Est. 1999: 2.2; Proj. 2000: 3.7\n- Operational balance: 1996: -7.1; 1997: -3.0; 1998: -4.9; Est. 1999: -13.6; Proj. 2000: -9.9; Prog. 2001: -4.6\n- Consolidated net debt: 1996: 46.5; 1997: 42.9; 1998: 44.5; Est. 1999: 58.0; Proj. 2000: 57.9; Prog. 2001: 56.6; 2002: 54.6\n\nMoney and credit (end-year, % change)\n- Broad liquidity 3/: 1996: 113.1; 1997: 117.6; 1998: 76.0; Est. 1999: 82.6; Proj. 2000: 41.1; Prog. 2001: 28.9; 2002: 22.0\n- Credit to private sector: 1996: 120.5; 1997: 125.8; 1998: 81.7; Est. 1999: 58.3; Proj. 2000: 38.0\n\nInterest rates (year average)\n- Treasury bill rate 4/: 1996: 132.4; 1997: 105.2; 1998: 115.7; Est. 1999: 106.2\n- Overnight money market rate: 1996: 115.8; 1997: 101.4; 1998: 111.9; Est. 1999: 107.0; 1999: ..\n\nBalance of payments\n- Trade balance 1/: 1996: -5.7; 1997: -8.0; 1998: -7.0; Est. 1999: -5.8; Proj. 2000: -7.2\n- Current account balance (including shuttle trade) 1/: 1996: -1.3; 1997: -1.4; 1998: -0.5; Est. 1999: -1.8; Proj. 2000: -1.6; Prog. 2001: -1.5\n- Reserves (US$ billions, end-of-period): 1996: 17,695; 1997: 19,575; 1998: 20,112\n- Reserve cover (in months of imports of GNFS): 4.0\n\nNotes from sources table:\n- 1/ In percent of GNP\n- 2/ Difference between balance of payments and the national income accounts comes from the treatment of shuttle trade and related services receipts.\n- 3/ Includes foreign currency deposits and repos.\n- 4/ Simple average across maturities ranging from three-months to one-year, net of tax."
    },
    {
      "heading": "Policy Recommendations and Safeguards Highlighted",
      "content": "- Ensure full and rigorous implementation of the budget.\n- Mobilize resources through privatization to reduce domestic borrowing and interest rates.\n- Maintain commitment to the preannounced exchange rate path while implementing a transparent preannounced exit strategy.\n- Accelerate structural reforms (privatization, pension reform, agricultural policy changes) to secure medium-term fiscal sustainability, raise efficiency, and reduce contingent liabilities.\n- Complement fiscal consolidation with active and diversified debt management.\n\nInternational Monetary Fund — Press Release No. 99/66 — December 22, 1999.\n\n---\n\n\n References\n\n- Republic of Türkiye and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9966"
    }
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    "Published: December 22, 1999",
    "The IMF approved a three-year Stand-By credit for Turkey equivalent to SDR 2,892 million (about US$ 4 billion) to support the government's 2000-2002 economic program.",
    "The first installment, available immediately, is equivalent to SDR 221.7 million (about US$300 million).",
    "Turkey joined the IMF on March 11, 1947 and its quota is SDR 964.0 million (about US$1.323 billion).",
    "Turkey's outstanding use of IMF financing currently totals SDR 437 million (about US$599 million).",
    "Turkey is embarking on a strong program to:",
    "Elements emphasized as necessary for success:",
    "Implementation of structural measures is described as critical to medium-term fiscal sustainability and to increase economic efficiency and growth.",
    "Central ambition: free Turkey from inflation and enhance prospects for growth and a better standard of living.",
    "Identified root cause of inflation: weakness of public finances driven by large and sustained primary deficits monetized over decades.",
    "The government's program rests on three pillars:",
    "Rationale for each pillar:",
    "Exit strategy: transparent and preannounced exit strategy from the exchange rate regime to avoid long-term rigidities.",
    "Main fiscal goal for 2000:",
    "Fiscal policy complements:",
    "Structural reforms aims:",
    "Expected outcomes of structural reforms:",
    "Two guiding considerations:",
    "2000 macroeconomic projections and goals:",
    "Selected historical and projected indicators (as presented):",
    "Real GNP: 1996: 7.2; 1997: 8.2; 1998: 3.8; Est. 1999: -2.1; Proj. 2000: 5.6; Prog. 2001: 5.2; 2002: 5.8",
    "Domestic demand: 1996: 10.0; 1997: 7.5; 1998: 0.6; Est. 1999: -2.3; Proj. 2000: 6.5; Prog. 2001: 5.0; 2002: 5.5",
    "CPI (end-of-period): 1996: 79.8; 1997: 99.1; 1998: 69.7; Est. 1999: 65.4; Proj. 2000: 25.0; Prog. 2001: 12.0; 2002: 7.0",
    "Unemployment rate (in %): 1996: 6.0; 1997: 6.4; 1998: 5.9; 1999: ...",
    "Gross national saving 1/ 2/: 1996: 18.9; 1997: 20.8; 1998: 23.2; Est. 1999: 20.0; Proj. 2000: 20.4; Prog. 2001: 19.5",
    "Gross domestic investment 1/ 2/: 1996: 23.4; 1997: 24.6; 1998: 23.9; Est. 1999: 22.8; Proj. 2000: 24.4; Prog. 2001: 23.3",
    "Central government Primary balance: 1996: 1.2; 1997: -0.2; 1998: 3.6; Est. 1999: 0.9; Proj. 2000: 3.9; Prog. 2001: 5.3",
    "Central government Overall balance: 1996: -8.4; 1997: -7.6; 1998: -7.7; Est. 1999: -12.1; Proj. 2000: -12.6; Prog. 2001: -6.0; 2002: -2.2",
    "Central government debt: 1996: 48.0; 1997: 48.4; 1998: 48.5; Est. 1999: 60.5; Proj. 2000: 60.1; Prog. 2001: 58.8; 2002: 57.0",
    "Consolidated public sector Primary balance: 1996: -1.2; 1997: 0.5; 1998: -2.7; Est. 1999: 2.2; Proj. 2000: 3.7",
    "Operational balance: 1996: -7.1; 1997: -3.0; 1998: -4.9; Est. 1999: -13.6; Proj. 2000: -9.9; Prog. 2001: -4.6",
    "Consolidated net debt: 1996: 46.5; 1997: 42.9; 1998: 44.5; Est. 1999: 58.0; Proj. 2000: 57.9; Prog. 2001: 56.6; 2002: 54.6",
    "Broad liquidity 3/: 1996: 113.1; 1997: 117.6; 1998: 76.0; Est. 1999: 82.6; Proj. 2000: 41.1; Prog. 2001: 28.9; 2002: 22.0",
    "Credit to private sector: 1996: 120.5; 1997: 125.8; 1998: 81.7; Est. 1999: 58.3; Proj. 2000: 38.0",
    "Treasury bill rate 4/: 1996: 132.4; 1997: 105.2; 1998: 115.7; Est. 1999: 106.2",
    "Overnight money market rate: 1996: 115.8; 1997: 101.4; 1998: 111.9; Est. 1999: 107.0; 1999: ..",
    "Trade balance 1/: 1996: -5.7; 1997: -8.0; 1998: -7.0; Est. 1999: -5.8; Proj. 2000: -7.2",
    "Current account balance (including shuttle trade) 1/: 1996: -1.3; 1997: -1.4; 1998: -0.5; Est. 1999: -1.8; Proj. 2000: -1.6; Prog. 2001: -1.5",
    "Reserves (US$ billions, end-of-period): 1996: 17,695; 1997: 19,575; 1998: 20,112",
    "Reserve cover (in months of imports of GNFS): 4.0",
    "1/ In percent of GNP",
    "2/ Difference between balance of payments and the national income accounts comes from the treatment of shuttle trade and related services receipts.",
    "3/ Includes foreign currency deposits and repos.",
    "4/ Simple average across maturities ranging from three-months to one-year, net of tax.",
    "Ensure full and rigorous implementation of the budget.",
    "Mobilize resources through privatization to reduce domestic borrowing and interest rates.",
    "Maintain commitment to the preannounced exchange rate path while implementing a transparent preannounced exit strategy.",
    "Accelerate structural reforms (privatization, pension reform, agricultural policy changes) to secure medium-term fiscal sustainability, raise efficiency, and reduce contingent liabilities.",
    "Complement fiscal consolidation with active and diversified debt management.",
    "[Republic of Türkiye and the IMF](http://www.imf.org/external/country/TUR/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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