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By Selcuk Gokoluk

ANKARA, March 5 (Reuters) - Turkey's economic growth in 2008 is likely to be less than last year as global factors are less favourable, the World Bank's country director told Reuters late on Tuesday.

The director, Ulrich Zachau, also said Turkey's corporate sector carries significant exposure to foreign currency risk because of a $51 billion net debt position in foreign currency.

"Global economic factors are less favourable this year than last year and there will be an impact in my view on Turkey... Turkish economic growth will likely be less than last year," he said.

Turkey's gross national product data for last year is yet to be published, but is expected to show a rise of 4-4.5 percent. The official growth target for 2008 is 5 percent.

"I do not think it will be dramatically lower but if I have to bet, I think it would not be higher than last year."

He said that the government should press ahead with key reforms like social security and privatisation to back growth.

"What Turkey can do to back its growth is to continue implementing the reforms to maintain its attractiveness for foreign investors and therefore for international financial markets," he said.

Turkey lured $22 billion foreign direct investment in 2007.

Turkey's corporate sector carries significant risk to sudden shifts in exchange rates due to its foreign exchange-denominated debt, he said.

"What is a significant risk is the significant exposure of the Turkish corporate sector to foreign currency borrowing...The Turkish corporate sector as a whole is exposed to foreign currency risk," he said, referring to a total $51 billion net position of the Turkish private sector.

The net foreign exchange position of the corporate sector is calculated as the difference between the stock of forex-denominated assets held by the corporate sector and the sector's forex-denominated liabilities.

Zachau said Turkey's financial sector was however much better placed than before to deal with global financial shocks.

"The liquidity ratios of Turkish banks and asset-loan ratios are very solid. They meet essentially all Basel criteria in terms of capital adequacy ratios," he said.

The bank would allocate a big chunk of its latest $6.2 billion loan to Turkey for energy and labour market reforms, he said.

The World Bank last week approved a four-year $6.2 billion financing programme for Turkey, making it one of the largest recipients of the bank's loans. (Editing by Neil Fullick)

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