"The recently announced Medium Term Program (MTP), which has been anticipated since June 2009, contains macroeconomic projections for the period 2010-2012. The projections appear to be reasonable and are consistent with TUSIAD forecasts. The framework drawn by the MTP will likely eliminate uncertainties vis-a-vis the economy.

 
A detailed analysis of the MTP reveals that the policies during the recovery period will be based on an ambitious inflation target while the improvement in public balances will not take place before 2011. In other words, expansionary fiscal policies are expected to continue in the recovery period.

 
The figures on public balances suggest that public expenditures will continue at their elevated pace to support domestic demand while revenues are expected to show a superior performance. However, bold increases in revenues will be difficult without certain amendments in tax rates, indicating that the budget deficit may be higher than what the projections indicate. The MTP foresees that the preparations of the long awaited "fiscal rule" will be completed in 2010, creating hopes for budget discipline to be established thereafter.

The MTP, currently, does not clearly define the methods of financing the budget deficit. The size of the public deficit and the way it will be financed are of paramount significance in articulating the dynamics between inflation, growth, foreign exchange and interest rates. It's expected that once the MTP Framework is announced, such ambiguities will be clarified.

 
The MTP lists a number of structural reforms to attain the targets specified in the program. These reforms are vital in order to achieve a sustainable high growth rate in the long term. However, although the measures specified in the MTP are more concrete when compared with previous programs, there is sufficient reason to doubt the authorities' determination for undertaking such reforms and reaching the targets of the MTP given their failure to implement these reforms in the past.

 
In conclusion, even though MTP will likely ease uncertainties in the economy, it has failed to meet expectations in the aftermath of a global crisis."