Turkey: Selected Issues

International Monetary Fund

No 2014/330, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper examines the external imbalance situation in Turkey. Turkey’s current account deficit is expected to remain elevated at about 5.5 to 6 percent of GDP through 2019. Reducing the deficit to a more sustainable level about 2.5 to 3 percent of GDP should be a key policy priority. Applying the Global Integrated Monetary and Fiscal Model, the paper quantifies the impact of four different approaches in reducing the current account deficit. The analysis shows that policies that directly increase private or public savings can reduce the external imbalance without reducing private investment and that they have relatively modest negative growth implications.

Keywords: ISCR; CR; GDP; inflation rate; interest rate; saving-investment balance; CPI; country risk risk premium; CBRT monetary policy framework; inflation expectation; monetary policy tightening; Inflation targeting; Inflation; Reserve requirements; Macroprudential policy instruments; Global (search for similar items in EconPapers)
Pages: 38
Date: 2014-12-05
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