Turkey at the Crossroads: From Crisis Resolution to EU Accession
Occasional Papers, September 19, 2005
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Bibliographic details
- Authors: Donal McGettigan, Xavier Debrun, Mark E Griffiths, Reza Moghadam, Ernesto Ramirez Rigo, Martin Schindler, Mats A Josefsson, Cheng Hoon Lim, Christian Keller, Christoph A Klingen, Chris Lane, Oya Celasun, Ashoka Mody, Dewitt D Marston, Mathew A. Verghis
- Published: September 19, 2005
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589063860.084
Executive summary and key challenges
- The key policy challenge for Turkey in the years ahead is to enhance and consolidate the advances made since the nation’s 2000-01 economic crisis.
- Higher growth could reduce unemployment and raise living standards toward European Union levels.
- The paper assesses the effectiveness of macroeconomic stabilization and structural reforms since the crisis and provides guideposts for future policy.
Areas reviewed and analytical focus
- Growth
- Inflation
- Debt
- Fiscal reform and fiscal consolidation
- Financial sector reform (including banking and financial statements)
- Labor markets
- The interaction between disinflation efforts and inflation expectations and the inflation process
Main analytical findings (as presented)
- Turkey achieved stabilization following the 2000-01 crisis, with advances that need to be enhanced and consolidated to meet future challenges.
- Macroeconomic stabilization and structural reforms since the crisis are evaluated in terms of their effectiveness across the reviewed areas (growth, inflation, debt, fiscal and financial sector reform, labor markets).
- Improved growth is identified as the primary channel to reduce unemployment and raise living standards closer to EU standards.
Policy guideposts and implications
- Continue and deepen fiscal consolidation and public financial management reforms to sustain stabilization gains.
- Strengthen financial sector reforms to improve banking sector resilience and financial statements transparency.
- Maintain disinflation policies while managing inflation expectations and the inflation process to preserve price stability gains.
- Advance labor market reforms to translate higher growth into lower unemployment and improved living standards.
- Pursue structural reforms that support higher and more inclusive growth compatible with European Union convergence objectives.
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