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Cablegate: Turkey's Economy April 14: Positive Public

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS ANKARA 002419

SIPDIS


SENSITIVE


STATE FOR E, EB AND EUR/SE
NSC FOR QUANRUD AND BRYZA
TREASURY FOR OASIA - MILLS AND LEICHTER


E.O. 12958: N/A
TAGS: EFIN ECON PGOV TU
SUBJECT: TURKEY'S ECONOMY APRIL 14: POSITIVE PUBLIC
STATEMENTS BOOST MARKETS SLIGHTLY

1. (SBU) Positive statements by IMF and GOT officials over
the weekend, combined with a lessening of anxiety over Iraq,
gave Turkish markets a modest lift this morning. The lira
strengthened to TL 1,633,000/dollar, yields on the benchmark
4/28/04 t-bill fell to 62.31 percent, and the stock market
rose 3.71 percent in morning trading.


2. (SBU) Investors told us they were heartened by positive
statements from the IMF and GOT officials, as well as by the
relatively good news coming out of Iraq (eg. war winding
down, relative calm in Northern Iraq). The local press
quoted IMF European Director Michael Deppler as saying he
thought the Turkish Government was now fully committed to the
reform program and that the Letter of Intent the Board would
consider this week would put Turkey back "on track." The
press also reported Treasury Deputy U/S Ozyildiz's statement
in Washington that the GOT would target a 7.7 percent primary
surplus this year (including 1.2 percent from a partial
spending freeze), as well as Central Bank Governor
Serdengecti's statement that Turkey could still hit its
inflation target and produce 3.6 percent growth this year.
(Note: Although 3.6 percent growth is lower than the
official estimate, it is on the high side of the range many
market analysts now say is likely. End note)


3. (SBU) Senior Turkish politicians also weighed in with a
positive, if less credible, message. State Minister Babacan
reportedly told the press that the government had minimized
the impact of the Iraq war via sound economic measures, while
Prime Minsiter Erdogan said Turkey would play a major role in
Iraq's reconstruction. Tourism Minister Aksit declared that
Turkey expected 15 million tourists to visit this year,
yielding $13 billion in revenue. Finance Minister Unakitan
announced that many foreign investors were interested in
buying state tobacco and spirits producer Tekel, and that
Turkey's Competition Authority would not object to the sale.


4. (SBU) The other positive factor in the markets is the
absence of a significant domestic debt redemption this week
(only a TL 500 trillion redemption).


PEARSON

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