Economic Reform in Turkey had been adopted in 2001 to control the rising inflation. In 1987, the Turkish government appealed to the European Union for a full membership. In 1995, a custom union had been finally established between the European Union and Turkey.
Reasons Behind the reform:
The economic growth of Turkey was getting slower due to the ongoing economic crisis from 1990 – 2000.
The country had been suffering from high inflation rate (68.5% annually). The Turkish currency was appreciated to such an extent that even a taxi ride became very expensive.
Turkey’s economic structure was unstable because of low public finances.
The weak banking systems in Turkey caused a liquidity crisis in 2000.
Productivity went low because of some external influential factors including earthquake in 1999.
The effect of the country’s integration with the European Union would be analyzed sector wise, that is, effect of the integration on the manufacturing, agricultural and network services.
The government made a plan to introduce reform in Turkey’s environmental policy, investment framework and labor market.
Several plans had been formed to control inflation to achieve macroeconomic stability.
An agreement had been established with the International Monetary Fund to increase output.
Impact of Economic reform:
A three year stand by credit agreement had been approved by the International Monetary Fund which supported Turkey’s economic programs.
The government was able to keep the inflation rate low and economic stability had been achieved.
The fiscal deficits had been reduced by 10.4% in 2004 compared to the figure of 2001.
Last Updated on : 26th June 2013