Effective macroeconomic and structural policies helped the Turkish economy rebound vigorously following the global crisis: growth averaged close to 9% in 2010-11, accompanied by strong job creation. In the process, however, the current account deficit widened to around 10% of GDP and consumer price inflation rose to over 10%. The economic slowdown since mid-2011 is helping to reduce these external and domestic imbalances, albeit only gradually, given rising international energy prices. In order to ensure that the current account gap moves back into safer territory and inflation to the 5% target, both macroeconomic and structural policy levers need to be used and action has started to be taken in this direction. This will also lay the basis for sustained improvements in living standards over the longer run.