Has Turkey been successful with economic reform packages?
According to many experts, although the current Turkish government has received strong criticism regarding major political issues both locally and abroad, it has on the other hand deserved praise for the economic performance achieved so far.
Similar comments have come from World Bank economists as well as IMF officials etc on different occasions.
For instance, the structural reforms implemented in the economy in the past decade by the government have been much praised by economists and referred to as good examples for many other troublesome economies in the world.
Looking back in the past when the Turkish banking sector faced big economic crisis in 2001, everybody believed the country needed a miracle to survive the challenge. Whereas now Turkey is not considered among the countries which do need to implement bitter and urgent economic measures to survive the almost desperate position they are in.
This certainly is not sufficient to state that Turkey has a prosperous economy like Sweden, Norway and alike, as increased domestic lending has resulted in increased figures of CAD (current account deficit) and thus caused economy to become more fragile to shocks to come from financial markets.
The reason is, to survive from the 2001 crisis Turkey had to use domestic loans and thus paved the way to an intolerably high level of CAD a true vulnerability for its economy. In other words, Turkey has had to pay a high price for the cure it benefited from, at the time.
On the other hand the Turkish economy has had to cope with the impact incurred by hundreds of thousands of Syrian refugees who have fled into the country as this is for certain to bring a heavy burden to the economy.
In spite of this truly unexpected negative development the country is expected to enjoy a 3.6 percent this year, whereas the CSEE is expected to have an average of 0.9 percent and the CIS is predicted to grow by 2.4 percent.
15.03.2013
Editor
