Gross national product grew a mere two percent in the third quarter of 2007, after annual growth rates of more than seven percent in the last four years.

The AK Party government, which was taken by surprise by the low growth figures, has been criticised by the business community for failing to speed up crucial economic reforms after winning a landslide parliamentary election in July.

"We will implement reforms starting in the first quarter of 2008 to raise Turkey's potential growth," Simsek told a televised interview on CNN Turk TV.

The government will pass a law for more flexible labour markets and also a research and development law to back innovation in an effort to raise growth rates, Simsek said.

He said Turkey's economic growth would be below a potential 6.5 percent growth rate in the near future but this would rise in the medium and longer term.

Turkey targets five percent growth in 2007 and 5.5 percent growth in 2008.

The parliament will pass a crucial and long-delayed social security reform, which raises retirement ages and simplifies a complex welfare system, before Oct 15, Simsek said. (Writing by Selcuk Gokoluk, editing by David Christian-Edwards)