Turkey to clear IMF debt by May

ISTANBUL (AFP) – Turkey is set to make a “clean break” with the International Monetary Fund by paying off its remaining debt by May, Prime Minister Recep Tayyip Erdogan said on Saturday.

“We have been paying and paying… Right now the debt stands at $860 million (643 million euros),” Erdogan said in televised remarks.

“When we pay the last slice in May, we will zero out the debt and make a clean break,” he added.

Erdogan said his Islamic-rooted Justice and Development Party (AKP) government, which took over a $23.5 billion IMF debt when it came to power in 2002, was in talks to loan five billion dollars to the the global institution.

The pay-off would mean a “new era” for Turkey where taxes can be put toward expanding national infrastructure once the debt is cleared, Finance Minister Mehmet Simsek was quoted as saying by Anatolia news agency.

“We have somehow maintained a debt deal (with the IMF) since 1958,” he said. “Turkey is now entering a new era by not signing into any programs and clearing its debt completely…Turkey will be climbing up the ladder in a sense.”

Over the decades, Turkish governments have signed 19 stand-by agreements with the fund for over $50 billion to meet financial challenges.

In 2008, Ankara managed to complete its last stand-by with the IMF, signed in 2005, and refused its aid in 2010, following two years of negotiation with the Washington-based institution.

During that period, the Turkish economy staged a spectacular recovery despite the global financial crisis, growing by 8.9 percent in 2010 and by 8.5 percent in 2011.

Its growth has however slowed down significantly since late 2011, with government forecasting a growth of five percent each for 2014 and 2015 amid its plans for a “soft landing.”

via Turkey to clear IMF debt by May: Erdogan – The West Australian.