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2003 OECD Economic Outlook, Volume 2003 Issue 1

image of OECD Economic Outlook, Volume 2003 Issue 1

Twice a year, the OECD Economic Outlook analyses the major trends that will mark the next two years. The present issue covers the outlook to the end of 2004 and examines the economic policies required to foster high and sustainable growth in member countries. Developments in selected major non-OECD economies are also evaluated.

In addition to the themes featured regularly, this issue contains five analytical chapters addressing the following questions: the telecommunications sector,  sources of divergence in growth trends among the major economies, recent patterns and developments in foreign direct investment,  and whether further trade and regulatory policy reforms would affect foreign direct investment flows and economic integration among OECD countries.

English French, German

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Turkey

Following the deep recession in 2001, the economy expanded by almost 8 per cent in 2002, with the end-year inflation rate falling to just under 30 per cent, well below the target of 35 per cent. Slower growth is projected in 2003, mainly because of the continuing reluctance of domestic banks to lend, higher real interest rates, and the war in Iraq. Inflation is projected to pick up in the first half of 2003, reflecting recent currency depreciation, the lagged effects of high oil prices and a seasonal hike in agricultural prices, before falling towards, though probably not reaching, the 20 per cent target by end-year.

The establishment of a single party government with a sizeable majority after the November 2002 general elections was initially welcomed by the financial markets. Nonetheless, a significant fiscal slippage has raised concerns. Adherence to expenditure targets and steady implementation of the structural reforms in the banking sector and elsewhere remain the key to maintaining the declining trend in inflation and creating the conditions for a durable recovery.

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