Turkey faces challenge raising growth in 2008
Turkey hopes to raise growth while reining in inflation in 2008, but economists say the government's current reform plans are insufficient to achieve this at a time of tighter credit in global markets. The government has vowed to shake up the social security system and labour markets and to boost aid for research and development, but analysts say these reforms will have a positive fiscal effect on a slowing economy only in the long term. Drought, high energy prices and political wrangling ahead of parliamentary elections in 2007 trimmed Turkey's gross national product growth rate to just 2 percent in the third quarter. One government minister said 2007 was a "wasted year" for reforms.
"Growth will be the most important economic indicator in the next 5 years instead of public finances. Growth of 4 percent will worsen unemployment and stoke social and even ethnic tensions," said Pelin Yenigun Dilek, chief economist at Garanti Bank.
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