1 turkish economy brief economic history economic policies main features of the economy recent...
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1
Turkish economy
• Brief economic history
• Economic policies
• Main features of the economy
• Recent macroeconomic indicators
• Towards a new agenda
2
• Regular boom-and-bust economic cycles since the 1950s
• Excessive budgetary expenditures and chronic inflation
• Very high interest rates
• Major economic crises in 1994, 1998 and 2000-2001
• Devastating 1999 earthquake and 2000-2001 crisis
Brief Economic History
3
• Signed a customs union with the European Union (EU) in 1995
• Became a pre-accession candidate for EU membership at the Helsinki Summit in December 1999
Brief Economic History
4
• Modern
• Participatory democracy
• Full integration in Europe
• A critical role in its region
• An export-oriented, technology-intensive production structure
Economic Policies
• Open economy
• Capital flows are free
• No exchange rate restrictions for investors
5
• A tough IMF program
• Undercapitalized banks seized, shut down or privatized
• Energy and telecommunications’ markets liberalized
• Independent banking regulator created in 2001
Economic Policies
6
• Population of 73 million
• GNP USD 363 billion and income per capita with USD 4,710
• Long term average growth rate is about 5 percent
• Services and industry have shares of 64 percent and 23 percent
Main features of the economy
Source: World Bank
7
• Unemployment rate is about 10 percent
• Exports and imports amount to 90 billions and 127 billions, respectively.
• The main trade partner is the EU with 50 percent share
Main features of the economy
Source: World Bank
8
Recent Macroeconomic Indicators
• Since 2002, impressive macro-economic performance
• Single-digit inflation after 35 years
CPI INFLATION (%)
68.5
29.7
18.49.32 7.72 9.65
0
20
40
60
80
2001 2002 2003 2004 2005 2006
GNP GROWTH (%)
-9.5
7.95.9
9.97.6
6
- 15
- 10
- 5
0
5
10
15
2001 2002 2003 2004 2005 2006
Source: World Bank
9
Recent Macroeconomic Indicators
CURRENT ACCOUNT BALANCE/GNP (%)
2.4
-0.8
-3.4
-5.2-6.4
-7.9- 10
- 8
- 6
- 4
- 2
0
2
4
2001 2002 2003 2004 2005 2006
EXTERNAL DEBT (billion $)
113130
144160 168
207
0
50
100
150
200
250
2001 2002 2003 2004 2005 2006
• However, transformation also brings about some inherent
risks
Source: World Bank
10
Recent Macroeconomic Indicators
TOTAL POPULATI ON (%)
46.6 47.5
5.9
0
10
20
30
40
50
0- 24 25- 64 65>
Ag
e
• Growth in recent years has been generating new jobs. But, it’s not been enough to lower unemployment rate.
• Declining share of agriculture
• Rising working age populationRisk generating factors
Source: Eurostat and Turkish Statistics Instutite
UNEMPLOYMENT RATE (%)
8.4
10.3 10.5 10.3 10.3 9.9
0
2
4
6
8
10
12
2001 2002 2003 2004 2005 2006
11
Recent Macroeconomic Indicators
• Significant increase in Foreign Direct Investment
FDI (million $)
2771830 1253 2024
8726
19234
0
5000
10000
15000
20000
25000
2001 2002 2003 2004 2005 2006
TOTAL NET DEBT (% of GNP)
90.578.5
70.463.5
55.344.8
0
20
40
60
80
100
2001 2002 2003 2004 2005 2006
• Decreasing total debt ratio
Source: World Bank
12
Towards a New Agenda
Picture is not bad at all
Recent growth performance
Macroeconomic stability
A new and healthy incentive structure
Global integration with also growing regional integration
However,
risks are serious and require competent management
Current account deficit
High unemployment
There is an urgent need for a new agenda
Setting the priorities, strategic action plans, effective delivery
Managing the EU process as a mechanism to mitigate risks
Building the required capacity for the new environment
Reducing inequality through equitable human and social development
Creating more and better jobs
13
Turkish economy
Absolute independence can just come true by the aid of economic independence..
Kemal ATATURK Founder of Turkish
Republic
1881-1938
14
Turkish economy
THANK YOU…
QUESTIONS??