Turkey needs 130 billion Euro in foreign financing in 2009, resulting from shortterm debt that needs to be rolled over, Ulrich Zachau, World Bank‘s country director in Turkey, told the audience at Active Academy’s Sixth International Finance Summit held in Istanbul. Zachau said that the Bank sees no problem with rolling over this debt. Investors have been withdrawing from the Turkish economy as the global financial crisis has spread into emerging market economies and has raised fears that some countries would be unable to finance their large current account deficits.

Turkey’s current account deficit is expected to hit 50 billion Euro by the end of this year. The global economic and financial crisis will certainly be felt in Turkey, simply because it has shown its affects in all emerging markets. As growth procrastinates, some changes will take effect in the country’s income, fiscal and social policies. Strong, new policies need to be generated and preventive measures against the risks must be taken, he urged.

If Turkey proceeds with the reforms it has been implementing, then the country would display a much improved and more resilient performance, Zachau said. He added that although Turkey is expected to attain 13 to 15 million Euro in foreign investments, that figure is expected to decline next year. However, Zachau assured Turkish officials and business circles that the finance sector in Turkey was in a much better state then it used to be, thanks to the reforms implemented during the past couple of years.

Turkey’s precautionary policy helped reduce the country’s public debts to below 40 percent. Turkey’s debt is a very small amount compared to its gross national products, showing that the country’s fiscal and economic policies have been successful, Zachau said. However, Turkey is not immune to crisis. A medium term fiscal frame has crucial importance, he added.