Türkiye has been one of the fastest-growing economies in the OECD over the past decade. However, the income gap with OECD countries remains large and structural challenges persist. More prudent macroeconomic policies are helping to restore sustainable growth and to reduce economic imbalances, and should be pursued. Over the long term, improving public finances will require more efficient consumption taxes, a broader income tax base, and strengthened social assistance. Higher labour market participation is also key. Women's participation remains particularly low and would benefit, among other measures, from expanding affordable early childhood education and care. Türkiye has made significant progress in addressing climate change, but emissions are still growing. Reaching the target of zero net emissions by 2053 would require higher effective pricing of carbon and transitioning away from coal. Finally, potential growth per worker in Türkiye has been slowing down and productivity remains relatively low, notably in services sectors. To boost living standards in a sustainable way, the country needs to improve productivity by upskilling the labour force, enhancing innovation, and easing business regulations.
SPECIAL FEATURES: REMOVING BARRIERS TO FEMALE LABOUR MARKET PARTICIPATION; STEPS TOWARDS GREEN TRANSFORMATION; COMPLETING THE TRANSITION TO A COMPETITIVE AND INNOVATIVE ECONOMY
