OECD Economic Surveys TÜRKIYE

OECD Economic Surveys Türkiye

Executive Summary

February 2023

FEBRUARY 2023

• Implementing a rules-based macroeconomic policy framework

• Making the regulatory framework more effective and predictable

• Boosting labour market prospects of women

• Creating more and better jobs

• Promoting the building up of human capital and innovation

• Making growth more sustainable and greener

Key recommendations

Implementing a rules-based macroeconomic policy framework

• Tighten monetary policy, including by increasing the main policy rate.

• Strengthen confidence in the independence of the Central Bank, including by reducing the turnover of the Bank’s board members.

• Where needed, provide targeted and temporary fiscal support to vulnerable groups.

• Bring the primary fiscal balance back to a 1% surplus. Adopt a medium-term fiscal strategy to prepare for long-run fiscal challenges.

• Further strengthen the framework for supervising and monitoring PPPs by introducing generic PPP legislation.

• Gradually phased out foreign exchange-protected deposits.

• Publish annual Fiscal Policy Reports, with short and longer-term projections and risk scenarios for liabilities, including contingent ones.

Making the regulatory framework more effective and predictable

• Create a one-stop shop issuing all licenses and authorisations.

• Apply the “silence-is-consent” principle to reduce the administrative burden related to obtain permits and licences.

• Adopt an anti-corruption strategy underpinned by credible action plans. Establish a permanent and independent anti-corruption body.

Boosting labour market prospects of women

• Continue to bring more women into formal employment, including by reallocating funds devoted to wage subsidies to well-designed hiring subsidies targeted at the most vulnerable groups.

• Increase and broaden the provision of quality early childhood and primary education.

Creating

More And Better Jobs

• Make permanent work more flexible and increase the scope for fixed-term and temporary work contracts, while ensuring social protection of workers and access to reemployment services.

• Shift social protection from the severance pay system to a broader-based unemployment insurance. Introduce portable severance accounts.

• Ensure that statutory minimum wages are affordable for firms, for example by setting a minimum wage floor at the national level and promoting collective bargaining at the enterprise level.

Promoting the building up of human capital and innovation

• Enhance up-to-date information on labour market outcomes for graduates from vocational education tracks, for example by extending the Career Counselling System.

Making growth more sustainable and greener

• Make emission pricing more consistent across sectors, including by gradually scrapping various subsidies to coal and raising the carbon price.

• Replace coal subsidies for poorer households by means-tested income support programmes without linking aid to fossil fuel consumption.