Current account deficit is concerning
Posted by meb at January 17th, 2008
World Bank Turkey Director Ulrich Zachau said Wednesday that Turkey’s large current account deficit is a matter of concern and the prospects for Turkey’s economy in 2008 are less bright.
Speaking at a meeting where a report prepared by the World Bank, titled “Global Economic Expectations 2008 – Spread of Technology in the Developing World,” has been presented at the Economic Policy Research Foundation of Turkey (TEPAV), Zachau said “Prospects for 2008 are less favourable. The management of macro economic risks will be important in 2008 and following years.”
“Turkey’s economy is increasingly integrated in the international economy. I feel overall this is a positive development but Turkey’s large current account deficit is a concern in this regard,” he said. Turkey’s current account deficit expanded 12 per cent year-on-year in the first 11 months of 2007 and is proportionally one of the largest in emerging markets, making the country more vulnerable to shifts in investor sentiment.
Zachau told that prominent reforms were made in the Turkish economy, recently.
“Turkey implements floating exchange rates, has reconstructed the financial sector, has an independent Central Bank, has sound fiscal policies and made reforms to strengthen business and investment climate,” Zachau remarked.
“In order for Turkey to develop rapidly, it must provide education and job to adults in a greater extent. Currently, only 40 percent of Turkish adults are employed, which is far below international standards,” Zachau noted.
To decrease rate of jobless is important in Turkey’s EU process as the issue of employment poses both an economic and political difficulty for Turkey, Zachau also said.
source: The New Anatolian
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