ANKARA - International Monetary Fund (IMF) said that the lack of macroeconomic stability in Turkey had not only negatively affected economic growth and inflation, but had also increased their volatility.
An IMF Working Paper on ''Leading Indicators of Growth and Inflation in Turkey'' prepared by Daniel Leigh and Marco Rossi from the European One Department was released on Thursday.
The paper said that Turkey's growth and inflation had been highly volatile over the last two decades.
Noting that since the late 1980s, booms and busts had characterized the business cycle in Turkey, the working paper recalled that since 1994 alone, Turkey had experienced three severe recessions, two of them triggered by financial crises.
Pointing out that identifying indicators that could help anticipate economic conditions and inflation was topical, in particular as Turkey moved to an inflation targeting regime, the paper said that under the 1999 IMF-supported program, the Central Bank had intended to introduce inflation targeting in 2002 as the exchange rate band widened and control of domestic monetary conditions had improved.
The paper stressed that inflation targeting required central banks to react promptly when the inflation forecast deviated from target.