OECD economic surveys Turkey January 2021

Basic statistics of Turkey, 2019
Executive Summary
	The recovery from the first wave of the pandemic was strong but faced headwinds
	Structural reforms are key to recovery and raising well-being
1  Key policy insights
	The COVID-19 shock is having a large economic and social impact
		Targeted lockdowns and health policy initiatives were initially effective but there is a second wave
		Strong policy stimulus triggered a vigorous rebound which faced headwinds
		Balance-of-payment strains have been significant
		The recovery will be uneven and there are important risks
		Policy priorities for containing the pandemic and supporting the recovery
	Strengthening macroeconomic fundamentals after the shock
		Re-balancing demand and securing external sustainability
		Moving to a more transparent and predictable fiscal framework
	Boosting long-term fiscal credibility
		Stabilising inflation and increasing monetary policy credibility
	Strengthening employment, job quality and social cohesion after the COVID-19 shock
	Resuming progress in well-being and social cohesion
	Regional convergence of living standards
	Social trust
	The region’s special challenges
	De-carbonising the economy and improving air quality
		Upgrading public governance
			Improving on public integrity and fighting corruption and money laundering
	Policy choices will be key to how Turkey emerges from the COVID-19 crisis and in the years ahead
	Annex A. Turkey’s follow-ups to main past OECD recommendations
	Annex B. Fiscal implications of the reform recommendations of this Survey
	Bibliography
2 Unleashing the full potential of the business sector
	Growth of potential output has lost steam
		Despite high entrepreneurial spirit, business dynamism has slowed down
	Strengthening the business sector through more market-friendly reforms is key to more durable economic growth
		The need for more formalisation
		A complex system of regulations entrenches the fragmentation of the business sector
		Streamlining business incentives would sharpen their effectiveness
		Avoiding size traps in the business tax system
	Addressing the debt overhang
		Reforms of the insolvency system could speed up the economic recovery after the Covid-19 pandemic and improve the allocation of resources
		Improving the supply of equity capital
		Helping SMEs to raise more equity capital
	Tapping the benefits of increased adoption of digital technologies
		Improving digital skills
			Access to high-speed broadband constitutes a bottleneck
	Bibliography