Economic growth is projected to moderate to 3.6% in 2023 due to weaker exports, while domestic demand will remain the main driver of growth. The devastating earthquake at the beginning of this year brought widespread damage in southern Türkiye. However, the boost from reconstruction is expected to largely offset the negative impact from disruption to economic activity. The unemployment rate is expected to stay close to 10%.
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For a more inclusive and sustained recovery structural challenges such as low labour force participation of women, widespread informality, weak skills, rigid employment rules hampering reallocation and large share of low-quality employment have to be addressed. The COVID-19 related contraction in economic activity affected informal workers the hardest, as many work in contact-intensive services such as tourism, catering and retail trade.
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2021 Structural Reform Priorities