Turkey grows stronger every day

Ali Babacan, the deputy prime minister in charge of the economy, said Monday that Turkey’s economic recovery trend has been getting stronger every day.

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 said Monday in Ankara, during a meeting held to evaluate the 2009 results of the government’s incentives system implementation. The meeting also focused on the latest developments in the real economy.

The country has been divided into regions based on socio-economic development of the areas for the implementation of this new incentives system, Babacan said.

Between July and December, some 1,523 incentives documents have been prepared, he said. The foreseen fixed investment total is 22.5 billion Turkish Liras, according to those incentives documents, Babacan added.

Fiscal rule

Turkey’s government is consulting with academics and nongovernmental organizations on the details of the fiscal rule it plans to implement this year, Bloomberg cited Babacan as saying.

Legislation for the rule, which will limit the size of the budget deficit as a proportion of gross domestic product, will be submitted to Parliament in the next few months, Babacan said.

The government has announced a formula setting the framework for annual budget preparations. Elements in the formula, such as the target level of the deficit and variables that define the speed at which the country will reach its target for the debt stock, have not been set.

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 the economy.

Recovery is yet to be seen everywhere except for mainly in developing countries in Asia and in the United States, said Babacan, describing the U.S. as a major obstacle against a global economic upturn.

Turkey's economy has been displaying relatively promising signs in consumption and production figures as of last year’s third quarter, said Babacan, according to Anatolia news agency.

Turkey's industrial output index recorded a 25.2 percent year-on-year rise in December of last year, marking an 8.7 percent rise on a monthly basis, he said. “These figures affirm what we have been seeing in the real economy as positive developments."

Babacan said business start-up figures were also up with a 78 percent year-on-year increase in the number of companies launched in December. That figure has been following an increasing trend since October, he said. Babacan also said non-performing loans fell to 5.4 percent of total loans in January.

Babacan also denied newspaper reports that there would not be a conclusion to loan talks with the International Monetary Fund until May. People should not believe reports about the negotiations unless the news comes directly from him or his colleagues at the Treasury, Babacan said in Ankara on Monday.