Turkey Public Finance Review : Turkey in Transition--Time for a Fiscal Policy Pivot?

Turkey has experienced rapid growth and improved social outcomes over the past decade. Per-capita income in United States dollar (USD) terms tripled during the first decade of the 21th century, and Turkey is now the world's 17th largest economy. Fiscal policy was an important component of the reform program that delivered these successes. Prudent fiscal policy also provided the fiscal space to soften the blow of the global economic and financial crisis in 2008-2009. This report documents the central role played by fiscal policy over the last decade and presents simulation results from a computable general equilibrium model that will help inform the future direction of fiscal policy to support sustained high growth. The dynamics of fiscal outcomes and private investment and savings raise a series of tradeoffs for policy going forward. The analysis in this report suggests that public investment can crowd-in private investment and promote a more sustainable growth path. Government revenue dynamics present another set of trade-offs. These fiscal trade-offs are likely to be exacerbated as the structural transformation of Turkey's economy slows down. Structural reforms can support the fiscal policy pivot, particularly by strengthening the supply side of the economy, for instance through an increase in female labor force participation.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2014-05-20
Subjects:	ACCESS TO CREDIT, ACCESS TO EDUCATION, ACCOUNTING, ACTIVE DEBT, AMORTIZATIONS, ASSET CLASSES, BANK CREDIT, BANKING CRISIS, BANKING SECTOR, BANKING SUPERVISION, BEQUEST, BINDING CONSTRAINT, BOND SPREADS, BORROWING, BORROWING COSTS, BORROWING REQUIREMENT, CAPITAL FLOWS, CAPITAL FORMATIONS, CAPITAL GAINS, CAPITAL INFLOW, CAPITAL INFLOWS, CAPITAL INVESTMENT, CAPITAL MARKETS, CAPITAL OUTFLOWS, CAPITAL SHARE, CAPITAL STOCK, CC, CENTRAL BANK, CONSUMER CONFIDENCE, CONTINGENT LIABILITIES, CREDIT MARKETS, CURRENCY, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICIT, CURRENT ACCOUNT DEFICITS, DEBT BURDEN, DEBT FINANCING, DEBT MATURITIES, DEBT MATURITY, DEBT RATIO, DECENTRALIZATION, DEMOGRAPHIC, DEMOGRAPHIC PROFILE, DEVELOPING COUNTRIES, DISPOSABLE INCOME, DOLLAR VALUE, DOMESTIC CREDIT, DOMESTIC DEBT, DOMESTIC DEBT MARKETS, DOMESTIC INTEREST RATES, EARNINGS, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC OPPORTUNITIES, ECONOMIC POLICY, ECONOMIC REFORMS, EMERGING ECONOMIES, EMERGING MARKET, EMERGING MARKET ECONOMIES, EMERGING MARKETS, EMPLOYEE, EMPLOYER, EMPLOYER CONTRIBUTIONS, EMPLOYERS, EMPLOYMENT GROWTH, ENROLLMENT, EXCHANGE RATE, EXPENDITURE, EXTERNAL CAPITAL, EXTERNAL DEBT, EXTERNAL FINANCING, FAMILIES, FEDERAL RESERVE, FEDERAL RESERVE BANK, FINANCIAL ASSETS, FINANCIAL CRISIS, FINANCIAL GLOBALIZATION, FINANCIAL MANAGEMENT, FINANCIAL MARKETS, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL EFFORT, FISCAL POLICY, FIXED CAPITAL, FLEXIBLE EXCHANGE RATE, FOREIGN CAPITAL, FOREIGN DIRECT INVESTMENT, FOREIGN FINANCING, FOREIGN INFLOWS, FORMAL SAVINGS, GLOBAL CAPITAL, GLOBAL ECONOMY, GLOBAL RISK, GLOBALIZATION, GOVERNMENT ACCOUNTS, GOVERNMENT EXPENDITURES, GOVERNMENT PAPER, GOVERNMENT REVENUE, GOVERNMENT REVENUES, GOVERNMENT SPENDING, GREATER ACCESS, GROSS DOMESTIC PRODUCT, GROWTH RATES, HOLDINGS, HOME OWNERSHIP, HOMEOWNERS, HOMEOWNERSHIP, HOUSEHOLD INCOMES, HOUSEHOLD SAVING, HOUSEHOLD SAVING RATES, HOUSEHOLD SAVINGS, HOUSEHOLDS, INCOME LEVELS, INCOME TAX, INCOME TAXES, INFLATION, INFLATION RATES, INFORMAL WORKERS, INFORMATION TECHNOLOGY, INSURANCE, INTEREST EXPENDITURES, INTEREST PAYMENT, INTEREST PAYMENTS, INTERNATIONAL CAPITAL, INTERNATIONAL DEVELOPMENT, INTERNATIONAL FINANCE, INTERNATIONAL STANDARDS, INTERNATIONAL TRADE, INVESTMENT FINANCING, INVESTMENT PORTFOLIO, INVESTMENT RATE, INVESTMENT RATES, INVESTMENT SPENDING, JOB CREATION, LABOR FORCE PARTICIPATION, LABOR MARKET, LIFE EXPECTANCY, LIQUIDITY, LOAN, LOCAL GOVERNMENTS, LOW INTEREST RATES, MACROECONOMIC STABILITY, MACROECONOMIC STABILIZATION, MACROECONOMIC UNCERTAINTY, MARKET CONSTRAINTS, MARKET REFORMS, MARKET TRENDS, MICRO DATA, MINIMUM WAGE, MINIMUM WAGES, MONETARY FUND, MONETARY POLICY, NATIONAL SAVING, NATIONAL SAVINGS, NOMINAL INTEREST RATES, OUTPUT, OUTPUT RATIO, PENSION, PENSION FUND, PENSION FUND CONTRIBUTIONS, PENSIONS, PERSONAL INCOME, PHYSICAL CAPITAL, POLITICAL STABILITY, PORTFOLIO, PORTFOLIO FLOWS, PORTFOLIO INVESTMENT, POSITIVE DEBT, PRIVATE FINANCING, PRIVATE INVESTMENT, PRIVATE SAVING, PRIVATE SAVINGS, PRIVATIZATION, PRODUCTION CAPACITY, PROPERTY TAX, PROPERTY TAXES, PUBLIC DEBT, PUBLIC DEBT MANAGEMENT, PUBLIC FINANCE, PUBLIC FINANCES, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC POLICY, PUBLIC SAVING, PUBLIC SAVINGS, RAPID GROWTH, REAL ESTATE, REAL EXCHANGE RATE, REAL INTEREST, REAL INTEREST RATE, REAL INTEREST RATES, RECEIPTS, REGULATORY FRAMEWORK, RETIREMENT AGE, REVOLVING FUNDS, RISK AVERSION, RISK MANAGEMENT, SAVINGS ACCOUNTS, SAVINGS RATE, SAVINGS RATES, SOCIAL DEVELOPMENT, SOCIAL FUND, SOCIAL FUNDS, SOCIAL SECURITY, SOURCES OF FINANCE, SOVEREIGN BOND, SOVEREIGN RISK, SUSTAINABLE GROWTH, TAX, TAX COLLECTION, TAX POLICY, TAX RATE, TAX RATES, TAX SYSTEM, TELECOMMUNICATIONS, TREASURY, UNEMPLOYMENT, UNEMPLOYMENT INSURANCE, UNION, WEALTH EFFECT, WEALTH EFFECTS,
Online Access:	http://documents.worldbank.org/curated/en/2014/05/19893358/turkey-public-finance-review-turkey-transition-time-fiscal-policy-pivot https://hdl.handle.net/10986/19321
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