Economy minster Ali Babacan said that the Letter of Intent (LoI) for the new stand-by arrangement with the IMF would be signed after December 1. Babacan furthered that for the time being there is no disagreement with the Fund over any issue, and the process goes on right track.
However, the minister did not give any specific date for signing the LoI. According to Babacan, GNP growth projection is 5% for the 2005-2007 period and the inflation projection that is 8% for 2005 is 5% for 2006, and 4% for 2007.
As far as the primary surplus target is concerned, the minister said that surplus target that was set at 6.5% of GNP for this year would be maintained at high levels for 2006 and 2007, however the figure would not necessarily be 6.5% again as it would depend on the developments at that time. According to the minister there is no need to be concerned about the current account deficit for 2004, however some measures could be necessary for 2005.
In a related note, in his press briefing Thomas Dawson, external relations director of the IMF said that there had been a progress on a range of issues including 2005 budget, medium-term framework, and monetary policy. Dawson added that as soon as the government completes its works an IMF mission will return to Turkey to continue discussions on the new stand-by arrangement.
According to the IMF official the government currently works on the specifics of structural reforms in tax, social security, and new banking law. Upon a question whether the IMF Board could ratify a new stand-by agreement this year, Dawson said that they had to wait and see when the Turkish authorities were ready for the IMF mission.