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Turkey is among the 20 world largest economies (and countries (84 million inhabitants). The country has diversified trade relationships with Europe, the Middle East and Asia.

Real GDP growth averaged 5.7% from 2002-2018, the result of deep structural reforms in the aftermath of the 2000-01 crisis. However, this performance was increasingly achieved through growing policy support and related macroeconomic imbalances. The country has experienced several boom-bust cycles during the last years, with two severe economic shocks: a currency crisis followed by a recession period in 2018, and the Covid outbreak in 2020 Q2. The country has coped with the COVID-19 outbreak through strong policy support (large public debt and domestic credit increases). Significant inflation (above 10% during the past 4 years, with no sign of disinflation) and the low level of foreign reserves put significant pressure on the exchange rate. Moreover, structural current account deficits are increasing its vulnerability to debt refinancing and exchange rate pressure.