Crisis-hit Turkey has adjusted its forecasts for year-end inflation and growth detailed in a tough economic recovery program, the International Monetary Fund's second in command, Stanley Fischer, said Saturday, July 28.
"The main changes are to reduce the growth rate and to raise the inflation rate projected for the year," Fischer, first deputy managing director of the Fund, told a press conference in Istanbul after two days of talks with Turkish officials and business leaders.
In an April recovery plan, Turkey had predicted year-end inflation of 52.5 percent in consumer prices and 57.6 percent for wholesale prices. The plan had forecast that the economy would contract by three percent in 2001.
Under the new adjustments, year-end wholesale inflation would be "of the order of 58 percent", Fischer said. He added that the economy was expected to shrink by 5.5 percent at the end of 2001.
"Those changes reflect what has happened so far this year and do not essentially change what is predicted to happen for the rest of the year," Fischer said in the news conference.
He added that the country's external current account was expected to show a surplus of about five billion dollars (€5.7 billion), in contrast to a previous forecast deficit.
Turkey's Economy Minister Kemal Dervis, meanwhile, said that Turkey was planning to bring down inflation in consumer prices to between 30 to 35 percent in the next 12 months. "This is not a definite inflation target, but a forecast," Dervis underlined.
The Turkish economy plunged into crisis in February when the government floated the Turkish lira in a bid to contain a severe cash crunch rocking markets. The move caused the currency to slump against the dollar and disrupted an IMF-backed program aimed at tackling inflation. ― (AFP, Ankara)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
