Türkiye flag Türkiye: Economic and Political Overview

The economic context of Türkiye

Economic Indicators

Turkish growth rebounded strongly from the initial impact of the pandemic, reflecting a dynamic private sector and stimulative policies, the country being among the few countries not to dive into recession. Turkey’s growth was buoyant in 2022 (+5.5%) and continued expanding in 2023 as sizeable pre-election stimulus further boosted domestic demand. For the year as a whole, the IMF estimated GDP growth at 4%, with household consumption as the main driver, coupled with government consumption and upbeat investment in machinery and equipment; whereas the contribution of net exports was negative. Following the March 2024 local election period, private consumption is expected to make a lesser contribution to growth. In contrast, government expenses are anticipated to maintain a positive impact, primarily driven by reconstruction following the February 2023 earthquakes (estimated at approximately USD 26 billion) and potential additional expenditures preceding the local elections. Overall, the IMF forecasts a GDP growth of around 3% over the forecast horizon.

Fiscal policy remained supportive in the first half of 2023. However, following the general and presidential elections in May, the authorities have gradually intensified the monetary policy position, leading to a doubling of the policy rate from June to September, reaching 30%. Additionally, the government has implemented numerous substantial tax hikes aimed at mitigating the substantial budget deficit and funding expenditures related to earthquake reconstruction. The government deficit was estimated at 6.4% of GDP in 2023 and is expected to remain high this year (4.4%) before declining marginally in 2025 (3.8%). Despite such a deficit, the substantial snowball effect stemming from elevated inflation contributed to keeping the government debt-to-GDP ratio near its 2022 level, notwithstanding the influence of lira depreciation, although the share of foreign-currency-denominated debt at end-July remained high at 67.1% (Fitch Ratings). Despite the adoption of a more restrictive policy stance, the expectation is that inflation – at 51.2% in 2023 - will remain elevated in the short term. This is attributed to factors such as inflation inertia, persistently high inflation expectations, and the repercussions of recent lira depreciation and tax increases. The gradual adjustment of excessive domestic demand is expected to play a role in a moderate reduction in inflation and the gradual improvement of external imbalances.

According to IMF estimates, employment partially recovered along with the rebound in economic activity, hence the unemployment rate decreased to 9.9% in 2023, its lowest level in nearly a decade, and is forecast to stabilize at around 10% over the projected period. Market conditions remain challenging, particularly among females and the youth. Wage inequality and the size of the informal sector remain long-standing problems. In 2023, the IMF estimated the country’s GDP per capita (PPP) at USD 41,888, 26.4% below the EU average.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 905.841,108.451,113.561,106.921,153.49
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 10,62212,84912,76512,55112,943
General Government Balance (in % of GDP) -2.0-2.7-4.4-3.6-3.1
General Government Gross Debt (in % of GDP) 30.828.930.931.032.0
Inflation Rate (%) 72.353.959.538.422.4
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -49.09-45.15-30.87-24.21-20.10
Current Account (in % of GDP) -5.4-4.1-2.8-2.2-1.7

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

The agricultural sector constitutes 6.5% of Turkey’s GDP. Despite employing 17% of the active population, the sector continues to suffer from low productivity due to reliance on small farms. Approximately 11% of Turkey’s territory is used as agricultural land. Wheat is the country’s main crop, though Turkey is the world’s third-largest exporter of tobacco and the largest producer of hazelnuts (nearly 70% of global production). Turkey continues to be a net exporter of agricultural products, but livestock imports are growing exponentially to compensate for the shrinking animal breeding sector. Mineral resources are abundant but under-exploited. According to the latest estimates from Turkstat, in 2023 cereals production increased by 7.4% when compared with the previous year (to 41.5 million tonnes), same as for that of wheat (+10.4% - 21.8 million tonnes), barley (+5.9% - 9 million tonnes), and fruits, beverage and spices crops (+2.2% - 27.4 million tonnes).

The secondary sector accounts for 31.3% of GDP and employs 27% of the workforce. Manufacturing is the main industrial activity of the country, accounting for 22% of GDP (World Bank). Car manufacturing and textile spearhead the Turkish industry, and other important segments are food products, basic metals and fabricated metal products, plastic products, chemicals, and electrical equipment. Turkey is the fifth-largest textile exporter in the world. The iron and steel sector in Turkey is of great importance for the general performance of the manufacturing industry due to its increasing production capacity, export potential and the inputs it provides to other sectors. In 2022, the value of manufacturing exports in Turkey reached an all-time high of USD 185.9 billion, accounting for 73.1% of total exports.

The services sector grew rapidly in the early 2000s, peaking at above 57% of GDP in 2009 but has fallen since to account for 51.7% of GDP in 2022, while employing 56% of the country’s workforce (World Bank, latest data available). Tourism represents around 7% of GDP and is a major source of foreign currency for the nation. Although the sector was severely affected during the COVID-19 pandemic, it recovered in 2022, when 45 million foreign visitors visited the country, which recorded its highest tourism revenue in history, at USD 46.3 billion (data Invest Turkey). As per the Turkish banking sector, it is comprised of 53 banks: 34 deposit banks (of which three are state-owned), 13 development and investment banks, and 6 participation banks (European Banking Federation).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 17.1 26.5 56.3
Value Added (in % of GDP) 6.5 31.9 51.2
Value Added (Annual % Change) 0.6 0.9 9.7

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist - Business Environment Rankings 2014-2018


Country Risk

See the country risk analysis provided by Coface.

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Sources of General Economic Information

Ministry of Agriculture and Forestry
Ministry of Science, Industry and Technology
Ministry of Treasury and Finance
Statistical Office
Turkish Statistical Institute
Central Bank
Central Bank of the Republic of Turkey
Stock Exchange
Istanbul Stock Exchange
Economic Portals
Ministry of Foreign Affairs
Turkish Investment Support and Promotion Agency
Capital Markets Board of Turkey

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Latest Update: July 2024