Publication: Türkiye Economic Monitor, March 2024: On the Right Tack
Loading...
Date
2024-06-03
ISSN
Published
2024-06-03
Author(s)
Editor(s)
Abstract
Türkiye’s economic policies helped quickly recover from the COVID pandemic. The policies being implemented since late 2021 were built on loose monetary policy, prudent fiscal policy, boosting exports and employment, and managed to deliver strong GDP growth in 2022. These policies, -in addition to the rise in energy prices amid geopolitical tensions and the global monetary tightening cycle-, however also led to a very rapid increase in inflation, a widening of the current account deficit and the decline in the reserves which in turn affected investors’ risk perception adversely and increased macro financial pressures in the run up to the May 2023 elections. As a consequence, the growth momentum also slowed down starting from the second half of 2022. Following the elections, the new government started a process of normalization in macroeconomic policies in 2023H2 with an emphasis on tightening monetary policy to achieve disinflation. The monetary policy rate hikes, ongoing simplification in the macroprudential policy framework, and the correction in the exchange rate since May 2023 have helped to gradually rebuild confidence in the economy, and the tax hikes have helped reduce the fiscal deficit. The impact of the new policy framework has started to be reflected in the reduction in risk premia, realignment of interest rates, strengthening in foreign exchange reserves, and the improvements in the assessment of credit rating agencies.
Link to Data Set
Citation
“World Bank. 2024. Türkiye Economic Monitor, March 2024: On the Right Tack. © World Bank. http://hdl.handle.net/10986/41641 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Thailand Monthly Economic Monitor, August 2024(Washington, DC: World Bank, 2024-09-03)Growth accelerated in Q2 to 2.3 percent, slightly above expectations, but the recovery continued to lag ASEAN peers. In June, data indicated a subdued recovery, with activity slowing and consumer confidence declining amid heightened political uncertainty. While manufacturing growth expanded modestly for the full quarter, June activity data shows a renewed decline, and the growth in tourist arrivals slowed. The trade deficit persisted, driven by lagging export recovery and rising imports, particularly from China. Inflation edged up slightly to 0.8 percent (y/y) but remained among the lowest in emerging markets. Fiscal spending accelerated despite political uncertainty; the Bank of Thailand maintained its policy rate while easing credit card repayment regulations to support households. The Thai baht appreciated, driven by expectations of the Federal Reserve’s easing cycle and a persistent current account surplus.Publication Jordan Economic Monitor, Summer 2024(Washington, DC: World Bank, 2024-10-31)The Jordan Economic Monitor (JEM) provides an update on key economic developments and policies over the past six months. It also presents findings from recent World Bank analytic work on Jordan. The JEM places them in a longer-term and global context and assesses the implications of these developments and other changes in policy on the outlook for Jordan. Its coverage ranges from the macro-economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Jordan. The cut-off data for this Jordan Economic Monitor is 10 July-2024.Publication Chad Economic Update April 2024 - Special chapter Hosting Refugees in an Inclusive Manner(Washington, DC: World Bank, 2024-07-16)The Chad Economic Update is a World Bank report series produced once a year, that assesses recent economic and social developments and prospects in Chad. The Economic Update also provides an in-depth examination of a selected policy issue, outlining its current challenges and potential going forward. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in Chad’s evolving economy.Publication Eswatini - Country Economic Memorandum(Washington, DC: World Bank, 2024-06-06)This report intends to be an input into the government’s strategic vision and policymaking to help move Eswatini closer to its ambitious objective of boosting inclusive growth and becoming an upper middle-income economy by: Carrying out diagnostics on past economic performance and undertaking forecasting analysis for potential future growth trajectories while uncovering binding constraints and realistic opportunities; Using a conceptual approach based on well established methodologies and benchmarking analysis with a set of aspirational peer countries; Emphasizing a growth strategy underpinned by greater investment, productivity, innovation, inclusion and government effectiveness; Drawing lessons from the policy experience of countries that faced similar challenges, including some that graduated or are close to graduating from upper middle- to higher-income status.Publication Lao People's Democratic Republic Economic Monitor, April 2024(Washington, DC: World Bank, 2024-05-06)Economic growth remains below pre-COVID-19 levels, mainly owing to protracted macroeconomic instability. Economic growth is estimated at 3.7 percent for 2023, with positive contributions from the services sector (for example, tourism, transport, and logistics) and mining. Electricity generation, mostly from hydropower plants, was tempered by low rainfall. Meanwhile, foreign investment increased substantially, linked mainly to the electricity and mining sectors. In contrast, public spending and household consumption remained constrained by limited fiscal space and high inflation. Merchandise export growth was limited, affected by supply-side constraints (for example, labor shortages) and subdued external demand. Amid limited foreign exchange liquidity and high external debt service obligations, depreciation and inflationary pressures persist. In 2023, the annual average official kip/US dollar exchange rate weakened by 31 percent, while the average parallel rate depreciated by 27 percent. The parallel exchange rate premium was about 13 percent in March 2024. Depreciation appears to coincide with periods of large public debt service repayments, usually between March and September. Given the high import dependence, depreciation brings changes in domestic prices. Headline inflation averaged 31 percent in 2023 and remained at about 25 percent for eight consecutive months from August 2023, with food, transport, hotel, and restaurant price increases the main contributors. In 2024, real GDP is projected to grow by 4 percent as potential growth will remain constrained by structural challenges. This outlook assumes no new debt service deferrals in 2024 and beyond, while deferrals accumulated during 2020–2023 would continue to be deferred. Economic activity is expected to benefit from recovered performance in tourism, transport and logistics services, and investment in the power sector and some special economic zones. Despite the slight uptick this year, economic growth will remain below pre-COVID levels, weighed down by macroeconomic instability and structural constraints such as a shortage of skills, both in quality and quantity, and a challenging business environment.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2012(World Bank, 2012)The main message of this year's World development report: gender equality and development is that these patterns of progress and persistence in gender equality matter, both for development outcomes and policy making. They matter because gender equality is a core development objective in its own right. But greater gender equality is also smart economics, enhancing productivity and improving other development outcomes, including prospects for the next generation and for the quality of societal policies and institutions. Economic development is not enough to shrink all gender disparities-corrective policies that focus on persisting gender gaps are essential. This report points to four priority areas for policy going forward. First, reducing gender gaps in human capital-specifically those that address female mortality and education. Second, closing gender gaps in access to economic opportunities, earnings, and productivity. Third, shrinking gender differences in voice and agency within society. Fourth, limiting the reproduction of gender inequality across generations. These are all areas where higher incomes by themselves do little to reduce gender gaps, but focused policies can have a real impact. Gender equality is at the heart of development. It's the right development objective, and it's smart economic policy. The World development report 2012 can help both countries and international partners think through and integrate a focus on gender equality into development policy making and programming.Publication World Development Report 2023: Migrants, Refugees, and Societies(Washington, DC : World Bank, 2023-04-25)Migration is a development challenge. About 184 million people—2.3 percent of the world’s population—live outside of their country of nationality. Almost half of them are in low- and middle-income countries. But what lies ahead? As the world struggles to cope with global economic imbalances, diverging demographic trends, and climate change, migration will become a necessity in the decades to come for countries at all levels of income. If managed well, migration can be a force for prosperity and can help achieve the United Nations’ Sustainable Development Goals. World Development Report 2023 proposes an innovative approach to maximize the development impacts of cross-border movements on both destination and origin countries and on migrants and refugees themselves. The framework it offers, drawn from labor economics and international law, rests on a “Match and Motive Matrix” that focuses on two factors: how closely migrants’ skills and attributes match the needs of destination countries and what motives underlie their movements. This approach enables policy makers to distinguish between different types of movements and to design migration policies for each. International cooperation will be critical to the effective management of migration.Publication Western Balkans 6 Country Climate and Development Report(Washington, DC: World Bank Group, 2024-07-16)This Regional Western Balkans Countries Climate and Development Report (CCDR) stands out in several ways. In a region that often lacks cohesive regional alliances, this report emphasizes how the challenges faced across countries are often common and interconnected, and, importantly, that climate action requires coordination on multiple fronts. Simultaneously, it illustrates the differences across countries, places, and people that require targeted strategies and interventions. This report demonstrates how shocks and stressors re intensifying and how investments in adaptation could bring significant benefits in the form of avoided losses, accelerated economic potential, and amplified social and economic spillovers. Given the region’s high emission and energy intensity and the limitations of its current fossil fuel-based development model, the report articulates a path to greener and more resilient growth, a path that is more consistent with the aspiration of accession to the EU. The report finds that the net zero transition can be undertaken without compromising the economic potential of the Western Balkans and that it could lead to higher growth than under the Reference Scenario (RS) with appropriate structural reforms.Publication World Development Report 2024(Washington, DC: World Bank, 2024-08-01)Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.Publication World Bank Annual Report 2024(Washington, DC: World Bank, 2024-10-25)This annual report, which covers the period from July 1, 2023, to June 30, 2024, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.