OECD urges Türkiye to maintain prudent macroeconomic policy

ISTANBUL

Türkiye should maintain credible and prudent macroeconomic policies and implement far-reaching structural reforms to strengthen productivity and ensure sustainable growth, the Organization for Economic Co-operation and Development (OECD) has said.

The recommendation was part of the OECD’s newly released report, the OECD Economic Survey of Türkiye, published as part of its country-based economic review series.

“Maintaining tight monetary policy and fiscal discipline will be key to ensure sustainable economic convergence with other OECD countries and a continued decline in inflation towards the 5 percent target,” OECD Secretary-General Mathias Cormann said during the presentation of the survey in Istanbul.

“Strengthening fiscal discipline will require structural reforms to improve spending efficiency and optimize tax revenues," he added.

According to the report, the Turkish economy has been one of the fastest growing in the OECD over the past decade, expanding at an average annual rate of 4.9 percent.

The OECD forecasts Türkiye’s gross domestic product (GDP) will grow by 3.1 percent in 2025 and 3.9 percent in 2026.

The organization noted that following the May 2023 elections, Türkiye began a process of economic policy normalization, with the government taking the necessary steps to stabilize the macroeconomic framework and put the Turkish economy on a sustainable path.

The new tightening approach to monetary and fiscal policies has contributed to stabilizing financial markets, increasing confidence and reducing economic uncertainty.

However, the OECD cautioned that these tighter financial conditions and restrictive policies are likely to weigh on household consumption and overall economic activity over the next two years.