Turkey should see the post-pandemic period as an opportunity to encourage foreign and domestic investment through stronger public governance, said an official from the Organization for Economic Cooperation and Development (OECD).
"Turkey is looking at a gradual recovery from the COVID-19 crisis and risks persist for growth and well-being," Alvaro Pereira, OECD director of economic country studies, said during a press conference Thursday on the latest survey of the organization over the Turkish economy.
He asserted that the country should focus on restoring macroeconomic stability.
The economic activity in Turkey declined sharply at the beginning of the pandemic, Pereira said, adding the government concentrated on credit expansion through state-owned banks during this period.
The OECD welcomed the Turkish Central Bank's recent tightening monetary policy, the official said, and called it very important in terms of macro-economic policies.
Since November, Turkey's risk premium in international markets saw a significant fall and this will reduce the financing costs of both the government and companies, he argued.
Pereira also advised the government to use market and labor reforms to empower businesses to grow and create quality jobs.
- Survey
The OECD on Thursday upgraded Turkey's growth forecast for 2020.
In its latest economic survey of Turkey, the organization found that "the Turkish economy's recovery from the first wave of the pandemic was strong but faced headwinds."
It said the country's growth rate is estimated to have declined by 0.2% in 2020 instead of 1.3% as previously expected.
It also projected the Turkish economy will grow 2.6% and 3.5% in 2021 and 2022 respectively.
Once a recovery is underway and investor confidence restored, the OECD survey predicted that "a combination of market, institutional and education reforms could lift GDP per capita by 1% per year over the coming years."
The OECD's Economic Outlook Report published on Dec. 1 predicted the growth will be 2.9% in 2021 and 3.2% in 2022.
The global body also said it estimated the average inflation rate in Turkey to hit 12% and in 2021 and 2022 respectively.
