ANKARA, Jan 8: The Turkish government announced on Wednesday a series of measures to cut spending and boost revenues as it aimed to keep a fragile recovery on track.

The measures, which contribute the equivalent $3.7 billion to the budget, include cutting back on the number of public employees to be recruited in 2003 and increasing levies on tobacco products and alcoholic beverages, Prime Minister Abdullah Gul told reporters.

“We place great importance on fiscal discipline,” he said speaking of tight fiscal targets envisaged in an economic recovery programme, backed by $16 billion in loans from the International Monetary Fund.

The IMF has rescued Turkey from financial trouble three times since 1999, allocating loans totalling about $30 billion.

The most recent loan — $16 billion — was announced in February 2002 under a three-year stand-by programme.

Gul said he had invited IMF deputy chief Anne Krueger to Turkey for talks on the programme. She was expected here on January 16.

The government, which came to power in November with pledges to ease the social costs of economic reform, raised questions over its commitment to abide by the IMF-programme, agreed to by the previous government, when it announced pension hikes for six million retirees in 2003, at a cost of some $1.8 billion.

Turkey managed to reduce inflation in 2002 to 29.7 per cent from 68.5 per cent the previous year. The government said it also expected to exceed its three per cent growth projection figure for 2002.

Central bank officials, however, have warned that recovery efforts would suffer if the government loosens fiscal policy.

Gul said on Wednesday the government had decided to cut the number of public servants to be recruited this year from 55,000 to 35,000, and has scrapped the planned purchase of 3,000 new vehicles.

Other measures include restructuring the tax debt of public and private institutions, which he said would yield the equivalent of at least $1.4 billion in additional revenues this year.

He also pledged to tighten control of social service payments and act against tax evasion and corruption.

Other financial measures — including a comprehensive new privatization programme — are to be announced in the coming days and the final draft of the 2003 budget will be submitted to parliament within a month, Gul said.—AFP