READ full country note (PDF)
Economic growth is projected to edge up to around 3½ per cent in 2017 and 2018. Consumer price inflation is back in double digits and disinflation is projected to be slow.
Fiscal and other measures, supported by a pick-up in export demand, have stimulated private consumption and investment. Their impact on public finances and the quality of credit allocation should be monitored. Faced with sharp exchange rate depreciation and rising inflation expectations, the monetary stance has been tightened, but explicit increases in the main policy rate are warranted.
Increasing net exports through further integration in global and European value chains is crucial for job creation in the face of a high unemployment rate, without further increasing the current account deficit. To this effect, the long-planned, though now uncertain, deepening of the customs union agreement with the European Union and its extension to agriculture and service sectors is key. To make the most of the resulting opportunities, up-skilling programmes should be implemented not only for young workers but also for entrepreneurs and low-skilled workers.
Economic Survey of Turkey (survey page)