Publication - Turkey: Challenging times call for pushing ahead with economic reform
Turkey’s economy has proven remarkably resilient in the face of a challenging global economic context. However, further action can be taken to raise productivity and advance the shift to a more balanced, sustainable and stronger growth path that will boost living standards for the entire population, according to the latest OECD Economic Survey of Turkey.
Future reforms should aim to strengthen economic resilience and social cohesion, improve the business environment and extend Turkish firms’ capacity to participate in global value chains, according to the Survey.
The Survey, presented in Gaziantep by OECD Secretary-General Angel Gurría and Turkey’s Deputy Prime Minister Mehmet Şimşek, recognises the challenging environment facing Turkish policymakers. Growth will remain strong – at around 4 percent in 2016 – despite headwinds from the conflicts raging across Turkey’s southern border, domestic tensions in the eastern regions of the country, trade restrictions which prevailed with Russia until July, and the inflow of millions of refugees.
“Turkey has had to cope with difficult times, but there is a silver lining amidst the volatility,” Mr Gurría said. “The Turkish business sector is demonstrating its extraordinary resilience and outstanding versatility, re-orienting exports to promising markets and vigorously seizing new opportunities. The challenge going forward will be to rebalance the economy, away from an over-reliance on private consumption to more export-oriented sustainable growth.”
The Survey encourages Turkey to continue pursuing prudent macroeconomic policies aimed at bringing down inflation, increasing domestic savings, improving women’s participation in the labour force and boosting foreign direct investment.
The OECD encourages Turkey to continue moving forward with a wide-ranging Action Plan to address structural problems in the regulatory environment. At the same time, labour market reforms to reduce informality, the simplification of business entry and exit rules, and new trade policies to foster exports should remain priorities.
Ensuring a level playing field for businesses of all sizes and improving the quality of human capital will be essential to reviving productivity growth, accelerating the convergence between different types of firms and generating broad-based formal employment.
Turkey's integration in global value chains remains below its potential. Improvements in trade and investment policies would make export orientation more profitable and attract more foreign direct investment. Moreover, substantial investment in human and knowledge-based capital will be necessary to catch up with international best practices.
In addition, the Survey examines the issue of the influx of refugees from Syria which has boosted demand, but also poses short term challenges to labour markets. Continued progress with Turkey’s labour market reforms and further efforts to guarantee educational opportunity for new arrivals would help integrate refugees into higher quality jobs in the formal sector.
An Overview of the Economic Survey, with the main conclusions, is freely accessible on the OECD’s web site at: www.oecd.org/turkey/economic-survey-turkey.htm. You are invited to include this Internet link in reports on the Survey.
For further information, journalists are invited to contact the OECD’s Media Division (+33 1 4524 9700).
page source http://www.oecd.org/
