ECONOMY IN BRIEF

KEY FACTS

MAIN ECONOMIC INDICATORS

The Turkish economy was re-modeled and became more outward looking with the structural adjustment program launched in the 1980s. The establishment of money and capital markets, the liberalization of exchange and interest rates and other prices have enhanced the effectiveness of monetary, fiscal and income policies. Liberalized import regime, new foreign investment and export promotion policies have enabled Turkey to take its place in the global economy. In this context, steady economic growth has been accompanied by a significant change in the composition of the GNP; the share of industry, and particularly services, has marked an important increase.

Since it started applying the principles of the market economy in the 1980s, Turkey's annual GNP growth rate has averaged 5% making the country one of the largest economies in its region.

However, the economic recession in the South East Asia followed by the Russian crisis in August 1998 adversely affected the Turkish economy in 1999. The difficulties were made worst by the devastating earthquakes in August and November. The economic losses caused by these natural disasters amounted to roughly 5% of Turkish GNP. As a result, there has been a 6.4% contraction in GNP in 1999.

Towards the end of the 1999, the government launched an economic stabilisation program to achieve a stable economic growth through reducing the budget deficit and the inflation rate. The program consists of strict fiscal and monetary policies, supported with structural reforms.

The principal points of the Adjustment and Stability Program are;

• Structural constitutional reforms allowing international arbitration
• Structural social reforms to reduce social security deficit
• Agricultural reforms
• Financial policy and management to reduce budget deficit
• Acceleration of privatisation process
• Restructuring of the banking sector via strict control and supervision
• Adopting new exchange regime to correspond to the inflation rate

As a result of these promising changes and the commitments of the government, the IMF agreed to sign a three-years Stand-by Agreement worth of $4 billion. The government also obtained $3 billion loan from the World Bank as a support for the implementation of structural reforms.

The verification of the candidature of Turkey as a full-member to the European Union at the Helsinki Summit held in December 1999 was an other important event of 1999.

Turkey is:

* a member of:

• the United Nations
• the World Trade Organization (WTO)
• the Organization for Economic Cooperation and Development (OECD)
• the International Bank of Reconstruction and Development (World Bank- IBRD)
• the International Monetary Fund (IMF)
• the Multilateral Investment Guarantee Agency (MIGA)
• the Islamic Development Bank
• the European Bank of Reconstruction and Development (EBRD)
• the Asian Development Bank
• the Black Sea Economic Cooperation (BSEC)
  (Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russian Federation, Turkey and Ukraine)
• the Economic Cooperation Organization (ECO)
  (Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan)
• the Developing Eight (D-8)
  (Bangladesh, Egypt, Indonasia, Iran, Malaysia, Nigeria, Pakistan and Turkey)