OECD economic surveys Turkey January 2021

Description

Basic statistics of Turkey, 2019 Executive Summary The recovery from the first wave of the pandemic was strong but faced headwinds Structural reforms are key to recovery and raising well-being 1 Key policy insights The COVID-19 shock is having a large economic and social impact Targeted lockdowns and health policy initiatives were initially effective but there is a second wave Strong policy stimulus triggered a vigorous rebound which faced headwinds Balance-of-payment strains have been significant The recovery will be uneven and there are important risks Policy priorities for containing the pandemic and supporting the recovery Strengthening macroeconomic fundamentals after the shock Re-balancing demand and securing external sustainability Moving to a more transparent and predictable fiscal framework Boosting long-term fiscal credibility Stabilising inflation and increasing monetary policy credibility Strengthening employment, job quality and social cohesion after the COVID-19 shock Resuming progress in well-being and social cohesion Regional convergence of living standards Social trust The region’s special challenges De-carbonising the economy and improving air quality Upgrading public governance Improving on public integrity and fighting corruption and money laundering Policy choices will be key to how Turkey emerges from the COVID-19 crisis and in the years ahead Annex A. Turkey’s follow-ups to main past OECD recommendations Annex B. Fiscal implications of the reform recommendations of this Survey Bibliography 2 Unleashing the full potential of the business sector Growth of potential output has lost steam Despite high entrepreneurial spirit, business dynamism has slowed down Strengthening the business sector through more market-friendly reforms is key to more durable economic growth The need for more formalisation A complex system of regulations entrenches the fragmentation of the business sector Streamlining business incentives would sharpen their effectiveness Avoiding size traps in the business tax system Addressing the debt overhang Reforms of the insolvency system could speed up the economic recovery after the Covid-19 pandemic and improve the allocation of resources Improving the supply of equity capital Helping SMEs to raise more equity capital Tapping the benefits of increased adoption of digital technologies Improving digital skills Access to high-speed broadband constitutes a bottleneck Bibliography