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.