Resource information
This Country Economic Memorandum (CEM),
prepared in collaboration with the Turkish authorities,
summarizes recent accomplishments in achieving high growth
and analyzes remaining public policy challenges and options
available to the authorities to meet these challenges. The
country seeks to double the nominal per capita income of its
population by 2013. It wants this rapid growth to be
inclusive of all segments of society, regions, and economic
sectors-especially through improved labor market performance
leading to more and better jobs in the economy. At the same
time, the authorities want to improve the quality of public
services which they see as an important complement to
economic growth in improving quality of life. They also
believe that the potentially negative environmental
consequences of the period of rapid growth ahead need to be
managed so that the positive welfare gains from higher per
capita income levels do not become eroded by environmental
nuisances. Turkey has succeeded in restoring macroeconomic
stability and rapid growth, it has been recovering from
crisis in 2001 and grew at 7.5 percent per year on average
during 2002-2006. In addition, certain dimensions of public
sector governance are instrumental in improving quality of
life and promoting competitiveness in Turkey including, for
example, food safety and environmental protection. Further
strengthening of the legal framework and institutions
fighting corruption could improve the investment climate,
the efficiency of the public sector, and popular support to
further reforms, and continuous macroeconomic stability is a
necessary (but not sufficient) condition for sustainable
growth. Strong fiscal discipline and monetary policy have
reduced chronic inflation to below 10 percent in 2005.
Public debt has also been reduced and its sustainability has
improved. Accordingly, the resilience of the Turkish economy
to shocks has improved as demonstrated by the rapid recovery
from turmoil in international markets in the summer of 2006
and, more recently, in the summer-autumn of 2007.
