Turkey: Policy will be key

The economy contracted beginning in early 2008 as falling domestic demand compounded the effects of the international downturn. GDP is expected to decline by nearly 6% in 2009, before recovering in 2010. The large output gap will push inflation back down to the target range.

Employment started to shrink in late 2008, and with the labour force continuing to grow steadily, the non-farm unemployment rate approached 20% in early 2009.

Given global and domestic uncertainties, the credibility of economic policy is key for sustaining confidence and the recovery. A robust medium-term spending framework would facilitate the operation of the automatic stabilisers and a new agreement with the International Monetary Fund would help to safeguard the confidence of domestic and international investors. Structural reforms to accelerate formalisation in the business sector would help improve longer-term growth prospects.

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See also www.oecd.org/turkey

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©OECD Observer No 274, July 2009

Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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