Turkey’s and the IMF

Summary

This feature explores Turkey’s 18th IMF program. In May 2001, the IMF agreed to lend $8
billion to Turkey to help stabilize its economy and halt a sharp slide in the value of its currency.
While initially the Turkish government resisted IMF mandates on economic policy, in 2003, the
government passed an austerity budget. By 2005, significant progress had been made and today,
the country appears to be on track for recovery, with lower inflation rates, an increase in
privatization, and a budget surplus.
Discussion Questions

1. What led to Turkey’s financial crisis? What goals did the IMF establish as part of the
loan agreement?

2. What are the challenges for a government to deal with a financial crisis like the one that
Turkey experienced?

3. Was the IMF successful in Turkey?