Turkey's Economy

Cameroon’s President Paul Biya formally welcomed Turkish President Abdullah Gul in capital Yaounde of Cameroon on Tuesday.

Earlier in the day, Gul had completed his meetings in Democratic Republic of Congo, and proceeded to Cameroon.

Turkish state ministers Faruk Nafiz Ozak and Selma Aliye Kavaf, Industry & Trade Minister Nihat Ergun, deputies and businessmen are accompanying Gul.

Gul will hold several meetings in Cameroon, and return to Turkey after completing his talks on Wednesday.

AFP – Turkey will not sign a loan stand-by deal with the IMF as it does not need emergency funds, the premier said Wednesday, ending nearly two years of talks dogged by disagreement on key issues.
“At this point, Turkey’s outlook as a country that is able to stand on its own feet economically has led the IMF to also believe that there is no need for a stand-by deal,” Prime Minister Recep Tayyip Erdogan said in televised remarks.
“We have jointly reached the conclusion that there will be no agreement.”
Erdogan cited failure to reach an accord with the International Monetary Fund on many issues as one of the reasons ruling out a loan facility.
“We have principles and it is out of the question for us to make concessions on these. I have already said we would not say ‘yes’ to such demands,” he added.
Erdogan has often accused the IMF of making “political demands” but the Washington-based group has never disclosed details of its differences with the Turkish government.
Earlier Wednesday, Economy Minister Ali Babacan suggested that the talks had been put on hold but left the door open to the possibility of resuming them.
“We thought it would be beneficial for us and them (the IMF) to take a break and look ahead,” Babacan said, noting that a stand-by deal was “not an urgent need, an obligation.
“There will be no talks on a deal until May” when an IMF staff mission will visit Turkey to evaluate the country’s economic outlook and policy plans, the first such visit in three years, he added.
Turkey and the IMF have been discussing for nearly two years the terms of a fresh stand-by deal since a 10-billion-dollar programme expired in May 2008.
IMF stand-by deals come with conditions attached, setting down guidelines and commitments for recipient governments that can be very unpopular as they usually entail spending cuts to help restore public finances.
Business circles and financial markets had been pressing the government for a new IMF deal as the global financial crisis plunged the country into a recession but they have largely given up hope of seeing an accord.
“The government does not have sufficient incentives to agree to a deal with the IMF in view of the ongoing sequential recovery and recent credit rating upgrades,” Inan Demir, chief economist at Finansbank, said in a research note.
“Since late January, the IMF issue seems to have slipped from the market agenda and it is fair to say that market participants, at least to some extent, have been resigned to the possibility that stand-by talks with IMF will not lead anywhere,” he added.
The Turkish economy was hit hard by the global economic crisis, with gross domestic product contracting 8.4 percent in the first three quarters of 2009.
Inflation fell to 6.53 percent last year, undershooting the official target of 7.5 percent but unemployment rose to record levels, hitting 16.1 percent at one time.
But since late last year, there have been signs of recovery. The rate of economic contraction has decelerated, inflation has begun to creep up and unemployment has shown signs of easing.
According to IMF estimates, the Turkish economy likely shrank 6.5 percent in the whole of 2009 before returning to growth of 3.7 percent this year.
In January, international ratings agency Moody’s upgraded Turkey’s debt and changed the outlook from stable to positive, with Standard & Poor’s taking a similar line last month.

Turkey’s unemployment rate increased 0.4 percent to 13.5 percent in December 2009, Turkish Board of Statistics, TurkStat.
Previous rate was 13.1 percent in November 2009.
Number of unemployed people increased 29 thousand to 3.3 million.
Labor force participation rate was calculated as 47.6 percent.
Unemployment rate was 15.6 percent in urban areas
Unemployment rate was 9.2 percent in rural areas in December 2009.

Turkish economy minister said Monday the country’s economic recovery continued with a stronger pace after fallout from a global recession.

State Minister for economy Ali Babacan however issued a warning that global risks remained high despite a revival in international commerce and signs of recovery.

“Questions remain whether the global recovery pattern could stand on its feet if governments withdrew their support,” Babacan told a press meeting on latest developments in the real economy.

Babacan said it was still uncertain how governments in developed countries — specifically in Europe — would deal with “the side effects of their extraordinary measures” to stimulate economy.

Babacan said recovery has yet to be seen everywhere except for mainly in developing countries in Asia and in the United States, which he described as a major obstacle against a global economic upturn.
The Turkish minister said Turkey’s economy had taken on a recovery track as well beginning from Q3 in 2009 with relatively promising signs in consumption and production figures.

Babacan said Turkey’s industrial output index recorded a 25.2% year-on-year rise in December, 2009, also marking an 8.7 percent rise on a monthly basis.

“These figures affirm what we have been seeing in the real economy as positive developments,” Babacan said.
Babacan said business start up figures were also up with a 78 percent year-on-year increase in the number of companies launched last December.