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Turkey needs to implement more reforms: World Bank

January 31, 2014

A sustained economic performance and further institutional reforms will be key for Turkey's medium-term outlook, World Bank director for Turkey , Martin Raiser says ANKARA A sustained economic performance and further institutional reforms will be Turkey's medium-term challenges, World Bank director for Turkey, Martin Raiser, said on Thursday. The country's recent ability to reduce its interest payments and take decisive steps in reforming its public financial management system has been successful, Raiser said. " Turkey made its economy more stable in the eyes of investors. This creates a fiscal buffer, which allows investors to buy Turkish treasury bonds at much lower interest rate because they know that Turkey's committed fiscal discipline," Raiser said. " Turkey has used the reduction in its interest payments to increase payments on health and education," he said. Two of Turkey's expected challenges for the medium-term, he added, will be comprehensive tax reforms, and further institutional reforms, such as the Court of Account Law and Procurement Law. "I think we need to look at changing the structure of taxation, because at the moment the majority of taxes come from consumption-based taxes. What happens if Turkey goes through a lower economic growth, and believe me it will, those tax revenues are going to be low as well," he said. "It's not enough for the government to say that they are going to be fiscally disciplined, they also have to have the legal institutional tools to do so," he added.

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Source: Anadolu Agency (Turkey)

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