WHY SHOULD TURKEY CONTINUE WITH STRONG FISCAL
ADJUSTEMENT?
LESSONS DERIVED FROM THE PAST
AgAR PASLI, Mediha
M.S., Department of Economics
Supervisor: Associate Prof. Dr. Nadir Ö / CAL
November 2006, 87 pages
Turkey managed to produce a strong fiscal adjustment during the period of 1999-2005
with the annual average of close to 5 percent. Moreover, with the help of this tight fiscal
stance, Turkey&rsquo / s public debt has been reduced from the peak of 90.5 percent of GNP in
2001 to 55.8 percent in 2005. Although this is a major achievement both in terms of the
size and the speed, the challenge for Turkey is now to continue with fiscal adjustment in
order to further reduce its public debt level which still poses a sizeable vulnerability risk
for the economy. Therefore, in order to provide an answer to the sustainability question,
this thesis first aims to (i) measure the fiscal adjustment in Turkey at the general
government level during 1999-2005 period, (ii) analyze sources of fiscal adjustment
based on the economic classification, institutional breakdown, and cyclical and structural
components. After understanding size and sources of adjustment, the reduction in public
debt will be decomposed into its parts including the contribution come from primary
surplus. This will shed light on whether Turkey could still rely on those factors for
further reduction in public debt in the future.
| Identifer | oai:union.ndltd.org:METU/oai:etd.lib.metu.edu.tr:http://etd.lib.metu.edu.tr/upload/12607851/index.pdf |
| Date | 01 November 2006 |
| Creators | Pasli, Mediha Agar |
| Contributors | Ocal, Nadir |
| Publisher | METU |
| Source Sets | Middle East Technical Univ. |
| Language | English |
| Detected Language | English |
| Type | M.S. Thesis |
| Format | text/pdf |
| Rights | To liberate the content for public access |
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