Front Matter Page
© 2003 International Monetary Fund
October 2003
IMF Country Report No. 03/324
Turkey: Fifth Review Under the Stand-By Arrangement, Request for Waiver of Performance Criteria and Extension of Repurchase Expectations—Staff Report; Staff Supplement; and Press Release on the Executive Board Discussion
In the context of the fifth review under the Stand-By Arrangement, request for waiver of performance criteria and extension of repurchase expectations, the following documents have been released and are included in this package:
the staff report for the fifth review under the Stand-By Arrangement, request for waiver of performance criteria and extension of repurchase expectations, prepared by a staff team of the IMF, following discussions that ended on July 18, 2003, with the officials of Turkey on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on August 1, 2003. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
a staff supplement of July 30, 2003 updating information on recent developments.
a Press Release summarizing the views of the Executive Board as expressed during its August 1, 2003 discussion of the staff report that completed the review.
The document listed below have been separately released.
Letter of Intent sent to the IMF by the authorities of Turkey*
*May also be included in Stair Report
The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.
To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to publicationpolicy@imf.org.
Copies of this report are available to the public from
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Front Matter Page
INTERNATIONAL MONETARY FUND
TURKEY
Fifth Review Under the Stand-By Arrangement and Requests for Waiver of Performance Criteria and Extension of Repurchases Expectations
Prepared by European I Department in consultation with other departments
Approved by Michael Deppler and Mark Allen
July 25, 2003
Stand-By Arrangement. The Fund supports Turkey’s economic program for 2002–04 under an SBA approved in February 2002. Total access under the arrangement is SDR 12.8 billion, or 1,330 percent of quota, of which about SDR 10.4 billion has been purchased so far (Appendix I). A further SDR 340 million becomes available on the completion of this review.
Discussions. During May 20–30 and July 8-18 the staff team met with Deputy Prime Ministers Şener and Şahin, State Minister for Economic Affairs Babacan, Minister of Finance Unakitan, Treasury Undersecretary Çanakci, Finance Undersecretary Aktan, State Planning Organization Undersecretary Tiktik, Central Bank of Turkey Governor Serdengeçti, Bank Regulation and Supervision Agency Chairman Akçakoca, other senior officials, and representatives of the private banking and business communities.
Staff. Team members included Reza Moghadam (head, July mission), Juha Kähkönen (head, May mission), Brian Aitken, Mark Griffiths, and Marco Rossi (EU1), Mark Flanagan and Ernesto Ramirez Rigo (FAD), Thomas Laryea (LEG), Mats Josefsson (MFD), Chris Lane (PDR), Odd Per Brekk (senior resident representative) and Carlos Piñerúa (MFD resident representative). Sclim Çakir (OED) attended most meetings during the May mission. An FAD technical assistance mission (Jean-Paul Bodin and Everardo Maciel) on social security arrears overlapped with the July mission.
Publication. The Turkish authorities have not yet decided on the publication of this staff report but, concerned at possible market sensitivity, have decided against publishing the staff report for the Fourth Review.
Contents
I. Introduction
II. Recent Developments
III. Policy Discussions
A. Fiscal Policy and Reforms
B. Monetary and Exchange Rate Policy
C. Financial Sector Reform
D. Private Sector Environment
IV. Financing Issues
V. Program Modalities and Risks
A. Program Monitoring
B. Capacity to Repay the Fund
C. Program Risks
D. Data Issues and Safeguards Assessment
VI. Staff Appraisal
Text Boxes
1. EU Accession Legislative Agenda
2. Social Security Reform
3. How Competitive is Turkey?
4. Financial Intermediation Costs: Causes and Consequences
5. Public Sector Debt Dynamics
Figures
1. Output and Inflation, 2001–03
2. External Indicators, 2001–03
3. Financial Indicators, 2001–03
4. Money and Credit, 2001–03
5. Projected Repayment Schedules at Expectation and Obligation
Tables
1. Quantitative Targets and Structural Conditionality due by mid-2003
2. Selected Indicators 1999–2004
3. Balance of Payments, 1999–2007
4. Monetary Aggregates, 1999–2003
5. Central Bank Balance Sheet, 2000–03
6. Public Sector Primary Balances, 2000–03
7. Banking System—Selected Indicators, 1998–2003
8. External Financing Requirements and Sources, 1999–2007
9a. External Sustainability Framework, 1999–2008
9b. Public Sector Sustainability Framework, 2001–08
10. Indicators of Fund Credit, 2000–08
11. Indicators of External Vulnerability, 1999–2004
Appendices
I. Fund Relations
II. World Bank Relations
Attachment I. Letter of Intent
Attachment I. Annexes
A. Structural Conditionality
B. Revised Performance Criteria, Test Dates, and Review Schedule, 2003–04
C. Quantitative Performance Criteria and Indicative Targets for 2003
D. Primary Balance of the Consolidated Government Sector
E. Overall Balance of the Consolidated Government Sector
Attachment II. Request for Extension of Repurchases
Front Matter Page
Press Release No. 03/135
FOR IMMEDIATE RELEASE
August 1, 2003
International Monetary Fund
Washington, D.C. 20431 USA
Telephone 202-623-7100
Fax 202-623-6722
Front Matter Page
INTERNATIONAL MONETARY FUND
TURKEY
Fifth Review Under the Stand-By Arrangement and Requests for Waiver of Performance Criteria and Extension of Repurchases Supplementary Information
Prepared by European I Department
(In consultation with other departments)
Approved by Michael Deppler and Mark Allen
July 25, 2003
