KEY ISSUES Context: Turkey’s economy has grown on average by 6 percent annually since 2010, but this has come at the expense of a persistently large external deficit making the economy sensitive to changes in external financing conditions. Inflation is high and above the authorities’ target,...

This Selected Issues paper examines the external imbalance situation in Turkey. Turkey’s current account deficit is expected to remain elevated at about 5.5 to 6 percent of GDP through 2019. Reducing the deficit to a more sustainable level about 2.5 to 3 percent of GDP should be a key policy...

This paper discusses key findings of the Seventh Review and Inflation Consultation Under the Stand-By Arrangement for Turkey. Macroeconomic developments have become less favorable since the last review in May 2007. Political developments have distracted attention from an ambitious economic...

This Selected Issues paper on Turkey describes the link between budget deficits and inflation. The paper outlines the key elements of the recent reforms and additional measures to reform the system. The study assesses the impact that inflation has had on the banking system, examines the sources...

Although Turkey’s economic performance has been strong, growing external imbalances exposed the country to a reversal of sentiment. In the wake of recent market turbulence, the authorities have recommitted to strong policies and stepped up program implementation. The authorities’ commitment...

This paper examines Turkey’s Seventh Review Under the Stand-By Arrangement, and Requests for Waiver of Applicability and Nonobservance of Performance Criteria. Successful macroeconomic management delivered an impressive economic performance in 2003. However, budget slippages interrupted this...

Turkey’s Fifth Review and Inflation Consultation under the Stand-By Arrangement and a Request for Waiver of Nonobservance and Applicability of Performance Criteria are discussed. Despite sharply higher interest rates, a weaker lira, and lower asset prices, economic activity has remained robust...

This paper discusses Turkey’s Request for Stand-By Arrangement (SBA) and Extension of Repurchase Expectations. Turkey’s economic program has delivered impressive results. Output has grown rapidly, inflation has fallen to its lowest level in a generation, and government debt has declined...