Economic Survey of Turkey, 2004

Turkey is at a crossroads. After hitting the most severe crisis of its recent history in 2000-2001, the economy bounced back and is now among the fastest growing economies in the OECD. A new institutional framework for monetary and fiscal policies as well as for product, labour and financial markets, infrastructure industries, and agricultural support opened a window of opportunity to escape from the three traps of low confidence, weak governance and high informality which underpinned the boom and bust cycle of the past and to embark durably on a higher growth path. Success will depend on fully implementing and completing the new policy framework. For Turkey to truly establish a new u0093economic regimeu0094 for growth based on macroeconomic and structural policy renewal, it is of crucial importance that confidence in government policies remains intact. So far, the convergence with the EU acquis, and the close co-operation with the IMF and the World Bank have contributed critically to the momentum of policies. The recent recommendation by the EU Commission to start EU accession negotiations u0096 if confirmed by the European Council in December u0096 promises to strengthen the international anchors and could underpin Turkeyu0092s shift to a new economic regime.