OECD releases economic outlook report on Turkey

Paris-based OECD released its Economic Outlook Report on Wednesday.

OECD releases economic outlook report on Turkey

The Organization for Economic Cooperation and Development (OECD) has said that the Turkish economy had rebounded sharply since the second quarter of 2009 thanks to good export performance and GDP was projected to expand by 6.8% in 2010 and 4.5% in 2011.

Paris-based OECD released its Economic Outlook Report on Wednesday and said job creation in Turkey would not be strong enough to absorb the rapidly growing labour force and unemployment would rise further.

"Prudent macroeconomic management helped to improve domestic and international confidence. Ongoing progress in fiscal transparency is expected to confirm this trend. Labour market reforms are needed to preserve competitiveness and foster sustainable employment growth," the organization said in its report.

"Employment in both rural and urban areas grew despite the contraction of output in 2009, reflecting large scale labour hoarding facilitated by nominal wage cuts. However, this was not enough to offset steady inflows of people to the labour market, driven by demographic factors and 'second earner' effects, which lead to higher unemployment," the report said.

It said, "unemployment remains high despite the acceleration of growth and net job creation. Reducing the high unemployment rate (17% in urban areas and 27% for young urban workers) requires fundamental labour market reforms."

The report said, "export performance is central for cyclical developments in Turkey, despite the rather low export share in GDP. The EU market ? the main export market for Turkey ? remains weak, but exporters have been shifting to other markets (Asia, Russia, North Africa and Middle East)."

Capacity utilisation remains low, but investment can be expected to increase if export performance continues to be strong, it said.

Headline inflation is expected to decelerate towards end-year, as temporary factors taper off, it said.

The report said, "macroeconomic policy framework has been solid. Turkey's risk premia, which had rapidly normalised after the global financial crisis, decreased further since fall 2009 and all rating agencies upgraded the sovereign credit rating."


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Last Mod: 26 Mayıs 2010, 15:49
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