Turkey’s economic and social development performance since the early 2000s has been impressive, leading to increased employment and incomes and making Turkey an upper-middle-income country. However, in the past few years, growing economic vulnerabilities and a more challenging external environment have threatened to undermine those achievements. For most of the period since 2000, Turkey has maintained a long-term focus on implementing ambitious reforms in many areas, and government programs have targeted vulnerable groups and disadvantaged regions. Poverty incidence more than halved over 2002–15, and extreme poverty fell even faster. During this time, Turkey rapidly urbanized, maintained strong macroeconomic and fiscal policy frameworks, opened to foreign trade and finance, harmonized many laws and regulations with European Union (EU) standards, and greatly expanded access to public services. It also recovered well from the global financial crisis of 2008/09.
The overall macroeconomic picture is more vulnerable and uncertain, given rising inflation and unemployment, contracting investment, elevated corporate and financial sector vulnerabilities, and patchy implementation of corrective policy actions and reforms. There are also significant external headwinds due to ongoing geopolitical tensions in the subregion.
COVID has deepened gender gaps and increased youth unemployment and the poverty rate. The risk of inequalities has also been increasing. The COVID-19 crisis is expected to have severely negative consequences for Turkey, further weakening economic and social gains.
Source: World Bank, Turkey Country Overview
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