UPDATE 1-IMF chief sees no need to help Turkey - papers

ANKARA, Sept 20 (Reuters) - International Monetary Fund chief Dominique Strauss-Kahn was quoted as saying by Turkish newspapers on Sunday that he saw "no need for now" for Turkey to agree on a loan deal with the international lender.

Turkey has been negotiating with the IMF since its last $10 billion accord expired in May 2008 and local markets have been on tenterhooks awaiting a new deal to help the emerging country weather the global economic crisis.

"Turkey is a developing economy at the moment but soon it will be a rapidly developed and strong economy. There are no indications that Turkey's economy needs help for now. If in the future Turkey needs IMF help we will be happy to provide that," Strauss-Kahn told Turkish newspapers in Washington on Saturday.

His comments cast further doubt on whether Ankara would agree on a loan deal after the government released on Wednesday its mid-term economic plan, which was welcomed by the IMF.

On Friday, Economy Minister Ali Babacan told investors in London Turkey would prefer a stand-by arrangement with the IMF if possible, but it would not be the end of the world if no deal was reached.

Turkey sharply revised its growth and budget targets on Wednesday in a three-year plan aimed at restoring investor confidence. Economists have said it is not clear how Turkey would achieve the announced targets and how it could fund its return to growth without the IMF's financing.

The Economy Ministry on Wednesday revised Turkey's 2009 economic contraction to 6 percent, way above the previous 3.6 percent estimate.

But Babacan pledged to return to sustainable growth led by the private sector while maintaining a downward trend in inflation in the medium-term economic programme.

Growth in the Turkish economy, which has been hard hit by the global economic crisis, will accelerate in 2011 after a return to growth in 2010, according to the plan.

Turkish financial markets will reopen on Wednesday following the Eid al-Fitr Islamic holiday. Link...