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After hitting the most severe crisis of its recent history in 2000-01, the Turkish economy bounced back and is now among the fastest growing economies in the OECD. At the same time, the inflation rate has declined sharply and could fall to a single digit annual rate in 2005, for the first time in...
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Turkey is undergoing a period of fundamental change. In the wake of the economic crisis and deep recession of 2001, a number of policy measures were taken to tackle the causes of financial and fiscal instability, to foster a quick recovery, and to create the conditions for further integration with the European Union. A...
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The emergence of huge fiscal imbalances in combination with the accumulation of systemic banking sector risks over the 1990s triggered the severe economic crisis of November 2000 and February 2001 with the collapse of the crawling peg exchange rate regime. The Turkish lira depreciated by about 50 per cent against the US dollar, inflation accelerated from 35 to 70 per cent during the year,...
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As has been discussed in Chapters 1 and 2, the rapid increase in government expenditures and debt has been the main cause of persistent inflation and vulnerability of the economy during the past decades, and the recent improvement of fiscal discipline has played a key role in the recovery from the 2001 crisis. The...
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The basic institutions of the Turkish economy have been undergoing a fundamental renovation since the turn of the millennium, driven by two forces. First, the National Economic Convergence Programme with the EU Acquis, adopted after the formal recognition of Turkey as a candidate for accession at the EU Summit of Helsinki in 1999, required major legal and regulatory changes in the areas of...
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There is a growing concern that long-run sustainable development may be compromised unless measures are taken to achieve balance between economic, environmental and social outcomes. This section looks at three specific issues of sustainable development that are of particular importance for Turkey: addressing...