Second Restoring Equitable Growth and Employment Programmatic Development Policy Loan

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The objective of the Second Restoring Equitable Growth and Employment Programmatic Development Policy Loan (REGE-DPL2) Program for Turkey is to support equitable growth and job creation over the medium term. Turkey has recovered strongly from the effects of the 2008-09 global crises. The Turkish economy contracted by 4.7 percent in 2009 but bounced back to grow by more than 8 percent. In 2010 this recovery was underpinned by economic reforms undertaken since 2001: fiscal adjustment, modernized debt management, an independent central bank, inflation targeting, a freely floating currency, and improved banking supervision. The first of the program's two main prongs is a set of critical business climate and broader competitiveness reforms. Turkey's medium-term growth strategy includes a continued focus on trade and financial integration with the European Union (EU) and an increasingly diversified set of other partners, with export growth expected to play an important role as competitiveness improves and global economic growth resumes. Sustaining high growth rates in the medium term requires using more of the available labor and using it more productively than before. The REGE-DPL2 program includes continuing reforms in the provision of social services (health and social security), while making these sustainable by reining in costs, including through global budgets and expenditure caps in the health sector. The REGE-DPL2 Program includes continuing reforms in the provision of social services (health and social security), while making these sustainable by reining in costs, including through global budgets and expenditure caps in the health sector.