Turkish economy

1
Turkish economy

• Brief economic history
• Economic policies
• Main features of the economy
• Recent macroeconomic indicators
• Towards a new agenda

2
Brief Economic History

• Regular boom-and-bust economic cycles since the
  1950s
• Excessive budgetary expenditures and chronic
  inflation
• Very high interest rates
• Major economic crises in 1994, 1998 and 2000-2001
• Devastating 1999 earthquake and 2000-2001 crisis

3
Brief Economic History

• Signed a customs union with the European Union
  (EU) in 1995
• Became a pre-accession candidate for EU
  membership at the Helsinki Summit in December
  1999

4
Economic Policies

• Open economy
• Capital flows are free
• No exchange rate restrictions for investors

• Modern
• Participatory democracy
• Full integration in Europe
• A critical role in its region
• An export-oriented, technology-intensive
  production structure

5
Economic Policies

• A tough IMF program
• Undercapitalized banks seized, shut down or
  privatized
• Energy and telecommunications markets
  liberalized
• Independent banking regulator created in 2001

6
Main features of the economy

• Population of 73 million
• GNP USD 363 billion and income per capita with
  USD 4,710
• Long term average growth rate is about 5 percent
• Services and industry have shares of 64 percent
  and 23 percent

Source World Bank
7
Main features of the economy

• Unemployment rate is about 10 percent
• Exports and imports amount to 90 billions and 127
  billions, respectively.
• The main trade partner is the EU with 50 percent
  share

Source World Bank
8
Recent Macroeconomic Indicators

• Since 2002, impressive macro-economic performance

• Single-digit inflation after 35 years

Source World Bank
9
Recent Macroeconomic Indicators

• However, transformation also brings about some
  inherent
• risks

Source World Bank
10
Recent Macroeconomic Indicators

• Growth in recent years has been generating new
  jobs. But, its not been enough to lower
  unemployment rate.

• Declining share of agriculture
• Rising working age population

Risk generating factors
Source Eurostat and Turkish Statistics
Instutite
11
Recent Macroeconomic Indicators

• Significant increase in Foreign Direct Investment

• Decreasing total debt ratio

Source World Bank
12
Towards a New Agenda

• Picture is not bad at all
• Recent growth performance
• Macroeconomic stability
• A new and healthy incentive structure
• Global integration with also growing regional
  integration

• However,
• risks are serious and require competent
  management
• Current account deficit
• High unemployment

• There is an urgent need for a new agenda
• Setting the priorities, strategic action plans,
  effective delivery
• Managing the EU process as a mechanism to
  mitigate risks
• Building the required capacity for the new
  environment
• Reducing inequality through equitable human and
  social development
• Creating more and better jobs

13
Turkish economy
Absolute independence can just come true by the
aid of economic independence.. Kemal
ATATURK Founder of Turkish
Republic
1881-1938
14
Turkish economy
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