OECD's annual economy report on Turkey. Macroeconomic developments and the short-term outlook are discussed in Part I. Part II presents and overview of the objectives of fiscal and monetary policy and their realization. In addition, new developments in other areas of economic policy are briefly sketched. Part III presents the main features of the Turkish tax system and major reform steps undertaken in the 1980s. It also highlights the shortcomings of the present system in order to identify possible directions for future reform. Part IV reviews recent developments of State economic enterprises, the main problems of this sector, and what can be done to alleviate the burden it imposes on the government budget as well as on the economy. Finally, conclusions for economy policy are presented in Part V.