Turkey has the world’s 15th largest GDP-PPP and 17th largest nominal GDP. The country is among the founding members of the OECD and the G-20 major economies.
During the first six decades of the republic, between 1923 and 1983, Turkey has mostly adhered to a quasi-statist approach with strict government planning of the budget and government-imposed limitations over private sector participation, foreign trade, flow of foreign currency, and foreign direct investment. However, in 1983 Prime Minister Turgut Özal initiated a series of reforms designed to shift the economy from a statist, insulated system to a more private-sector, market-based model.[page needed]
The reforms, combined with unprecedented amounts of foreign loans, spurred rapid economic growth; but this growth was punctuated by sharp recessions and financial crises in 1994, 1999 (following the earthquake of that year), and 2001; resulting in an average of 4% GDP growth per annum between 1981 and 2003. Lack of additional fiscal reforms, combined with large and growing public sector deficits and widespread corruption, resulted in high inflation, a weak banking sector and increased macroeconomic volatility. Since the economic crisis of 2001 and the reforms initiated by the finance minister of the time, Kemal Dervis, inflation has fallen to single-digit numbers, investor confidence and foreign investment have soared, and unemployment has fallen.
Turkey has gradually opened up its markets through economic reforms by reducing government controls on foreign trade and investment and the privatization of publicly owned industries, and the liberalization of many sectors to private and foreign participation has continued amid political debate. The public debt to GDP ratio peaked at 75.9% during the recession of 2001, falling to an estimated 26.9% by 2013.
The real GDP growth rate from 2002 to 2007 averaged 6.8% annually, which made Turkey one of the fastest growing economies in the world during that period. However, growth slowed to 1% in 2008, and in 2009 the Turkish economy was affected by the global financial crisis, with a recession of 5%. The economy was estimated to have returned to 8% growth in 2010. According to Eurostat data, Turkish GDP per capita adjusted by purchasing power standard stood at 52% of the EU average in 2011.
In the early years of the 21st century, the chronically high inflation was brought under control and this led to the launch of a new currency, the Turkish new lira, on 1 January 2005, to cement the acquisition of the economic reforms and erase the vestiges of an unstable economy. On 1 January 2009, the new Turkish lira was renamed once again as the Turkish lira, with the introduction of new banknotes and coins. As a result of continuing economic reforms, inflation dropped to 8% in 2005, and the unemployment rate to 10%
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