Turkey : Recovery a chance to reinforce long-term economic growth, says OECD
Turkey’s economic growth is likely to be among the strongest of OECD countries in 2010, supported by financial stability, international investor confidence and a dynamic business sector, according to the OECD’s latest survey of the country.
After falling nearly 5% in 2009 in the wake of the global crisis, Turkey’s GDP is expected to expand by more than 6% this year. Unemployment is likely to fall markedly.
Presenting the survey in Ankara, OECD Secretary-General Angel Gurría said: “Turkey should build on the positive shock it produced by emerging from the crisis with a strengthened economy. It should now finish the job by completing the fiscal architecture to consolidate its credibility.”
He said the task also requires implementing a number of key reforms so that the entire business sector can benefit from the stronger economic environment.
But he added Turkey’s largest export markets, notably in Europe, remain fragile. Strong, sustained growth will depend on Turkey reducing further its economic vulnerabilities and stimulating labour productivity.
Addressing the weaknesses includes modernising how public finances are managed, says the survey. Plans for well thought out rules, transparency and comprehensive auditing must be pursued.
The survey also says the Turkish economy needs to move away from its dependence on undeclared and informal business. Although informality and semi-informality have helped Turkish firms maintain flexibility in a competitive international environment, they have become a trap as they slow down economic modernisation and productivity growth. Reducing informality is also crucial for improving public finances and distributing taxes more equitably.
The survey recommends reducing rigidities in the labour market to make the jobs market more flexible in areas such as severance pay, the minimum wage and temporary work.
To obtain a copy of the OECD’s Economic Survey of Turkey or for more information, journalists are invited to contact the OECD’s Media Division (email@example.com; tel. +33 1 45 24 97 00).