OECD estimates Turkey's Growth Rate to be 6 pct in 2008 (10.12.2007)

OECD: Turkey's growth rate would be 6 percent in 2008

Organization for Economic Cooperation & Development (OECD) in its latest Economic Outlook, predicted growth rate would be 6 percent in Turkey, in 2008.

OECD's economic developments and projections for Turkey explains that "The economy, which had slowed down earlier in the year as a result of monetary tightening in 2006 and political uncertainties in the spring, gained momentum after the elections in July. In the absence of shocks, growth should settle at around 6 percent in 2008 and 2009."

"Progress with enhancing the resilience and performance of the economy is put at risk by loss of competitiveness provoked by booming capital inflows," the report said. "In this context the government is encouraged to restore fiscal restraint, which would help the central bank to continue reducing interest rates, and to increase the flexibility of product and labour markets to help the economy to cope with strong appreciation."

The OECD report showed Turkish gross domestic product growth projected at 5.8 percent in 2008 and 6.3 percent in 2009.

Turkey's current account deficit is expected to remain above 7 percent and unemployment rate above 9 percent, the report said.

"If the pending reforms targeted by the government, notably in the labour markets and for the modernisation of the business sector, are implemented assertively, this could accelerate Turkey's shift to a stronger growth rate," the OECD said.

The New Anatolian / Ankara