ABSTRACT
Following the turbulent 1990s, Turkey faced a severe financial crisis in 2001. From then up to the onset of the global crisis, important steps towards achieving macroeconomic stability were taken. Fiscal policy has been remarkably disciplined, public debt has been reduced sharply, the financial sector has been deepened, strengthened and well regulated, and inflation and risk perception have significantly declined. Following the relative deterioration in fiscal indicators due to sharp output loss during the global crisis, the improvement trend observed between 2002 and 2007 continued after 2008. The first natural question that follows is whether Turkey’s goal to achieve macroeconomic stability has been accomplished, and if not, what problems remain.
