Statement at the Conclusion of an IMF Staff Visit to Turkey

An International Monetary Fund (IMF) mission, headed by Ernesto Ramirez Rigo, visited Istanbul and Ankara on May 31–June 6, 2012 to discuss recent economic developments and preparations for the 2012 Article IV consultation discussions. The team met with senior officials and staff at the Treasury, Ministry of Finance, Central Bank, and Banking Regulation and Supervision Agency, as well as representatives of the business community.

The Turkish economy has been resilient to heightened stress in the Euro area and a weak recovery in most advanced economies and, although reduced, vulnerabilities remain. The tightening of macroeconomic policies since the second half of 2011 was appropriate and has contributed to slowing domestic demand. Encouragingly, the economy is decelerating toward a soft landing, thus helping redress the imbalances built over the last two years. It will be important to maintain current budget targets for 2012 and tight monetary policy to guard against external shocks and to strengthen existing policy buffers. However, global economic developments pose downside risks. Should these risks materialize, the public sector's strong balance sheet gives the authorities room for countercyclical policies.

The mission thanks the participants of the meetings for their time and candid expression of their views. It is expected that the team will return to Turkey in September for its regular Article IV consultation discussions, which the IMF conducts with its member countries on an annual basis.

Source | International Monetary Fund - Blog NEWS | http://imf-news.blogspot.com/2012/06/statement-at-conclusion-of-imf-staff.html

Statement at the Conclusion of the IMF Staff Mission to Sri Lanka

An International Monetary Fund (IMF) staff mission, led by Mr. John Nelmes, visited Colombo June 4 - 15 to discuss economic developments and policies. The team met with government and Central Bank officials, as well as representatives of civil society and the private sector. The team issued the following statement today at the conclusion of its visit:

“The authorities are successfully implementing a bold package of policy measures to curb the current account deficit and safeguard reserves, and these measures are yielding fruit. Credit growth has slowed and imports have declined. Given the new policy framework—in particular the pursuance of exchange rate flexibility—as well as continued strength in remittances and success in attracting capital inflows, international reserves at the central bank have now stabilized. Government revenue collections and interest expenditures are under pressure, but the authorities remain committed to meeting their deficit targets.

“The Sri Lankan economy should grow by around 6¾ percent this year, as tighter macroeconomic policies work to ease demand to a more sustainable pace. The uncertain global environment poses a downside risk, but the rupee depreciation should provide a boost to the economy going forward. Inflation is likely to rise to the upper single digits, and we thus see the need to keep monetary policy focused on inflation pressures for the time being. While the transition has caused difficulty for many segments of society, we share the authorities’ assessment that the new policy framework will strengthen the fundamentals of the economy and lay the basis for sustained economic growth.

“The team will return to Washington and continue to assess policy actions and economic developments. We look forward to moving toward completion of the eighth and final review of the Stand-By Arrangement. The authorities have indicated their interest in continued, close engagement with the IMF—possibly in the form of financial support for the authorities’ economic development agenda—and we will continue such discussions in the near future.”

Source | International Monetary Fund - Blog NEWS | http://imf-news.blogspot.com/2012/06/statement-at-conclusion-of-imf-staff_19.html