(Adds details, background)
By Selcuk Gokoluk and Thomas Grove
ANKARA/ISTANBUL, Feb 6 (Reuters) - Turkey has presented an economic stimulus package to parliament in a move to reverse a sharp downturn in the economy by supporting manufacturers, Turkish papers said on Friday.
The package will give the government cabinet the power to reduce some corporate tax on investment by up to 90 percent, and also cut taxes in textiles and retail clothing by 75 percent for a five-year period if they move their plants to certain cities.
Reports said the plan will target the poorer eastern and southeastern parts of Turkey, and the cabinet has until the end of 2010 to determine where the industrial stimulus measures will take effect.
Turkey is facing a sharp economic slowdown after several years of stellar growth as the current global economic crisis hits domestic demand and bites into crucial European export markets.
Economists said the government measures would make a minimal impact on stimulating the economy and might widen Turkey's budget deficit.
Poor state finances have been a major factor creating Turkey's several financial crises in the past.
"These measures are not the remedy for the problem we have. They will only make a marginal effect in solving the manufacturers' problems. The real problem is a financing shortfall of $16-$17 billion," said Ekspres Invest analyst Guldem Atabay.
The Turkish lira
The government fears rising joblessness will stir social unrest ahead of municipality elections next month.
Growth in the third quarter slowed to a six-year low of 0.5 percent, and Moody's sees a 0.8 percent economic contraction in Turkey in 2009.
Turkey has been locked in negotiations with the International Monetary Fund on a loan deal to reinforce state finances, but talks were suspended last month after the two sides failed to resolve their differences.
The IMF had opposed tax cut plans in Turkey in the past, saying this would hurt fragile public finances.
Markets expect a deal around $25 billion, which would make it the biggest loan request in Turkey's history. (Reporting by Thomas Grove and Selcuk Gokoluk; Editing by Andy Bruce)