Türkiye flag Türkiye: Economic and Political Overview

The economic context of Türkiye

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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 the first half of 2022 (7.5% year-on-year) driven by sustained private consumption and a recovery in tourism. However, investment activity has been subdued and macroeconomic imbalances have risen, resulting in an overall yearly growth rate of 5% according to the IMF. Economic growth is projected to decelerate to around 3% per annum in 2023 and 2024 amid weaker external demand, persistent geopolitical uncertainties, and slower household consumption in light of rising inflation and the erosion of purchasing power.

Fiscal policy remained supportive in 2022, with the country increasing its budget deficit to 5.9% (from 5.1% one year earlier – IMF) following the approval of several measures for energy consumers and ambitious state-subsidised social housing projects. The IMF expects the deficit to widen over the forecast horizon, to 6.5% this year and 6.6% the next, partly due to the global stagnation resulting from the impacts of the war in Ukraine which are expected to worsen the current account deficit. In 2022, the public debt-to-GDP ratio decreased to 37.5% from 41.8% but should follow an upward trend in 2023 (37.7%) and 2024 (39.6% - IMF). The debt level is still low, although the short-term foreign debt stock totalled USD 138.1 billion as of the end of August 2022 (up by 13.6% from end-2021). Despite high inflation – the rate skyrocketed to 73.1% in 2022 due to increased energy bill and higher cost of imports due to the depreciation of the Turkish lira - the central bank has reduced its base rate several times, to the current level of 9% as of January 2023, making Turkey being the only OECD country to have lowered policy interest rates during the year. Hence, the inflation rate is forecast to remain high in 2023 (51.2%) reflecting a gradual pass-through of the recent lira depreciation and wage increases to consumer prices, before easing slightly the following year (24.2% - IMF). By the end of 2022, the IMF recommended early policy rate hikes accompanied by moves to strengthen the central bank’s independence.

According to IMF estimates, employment partially recovered along with the rebound in economic activity, hence the unemployment rate decreased to 10.8% in 2022 and is forecast to stabilize at around 10.5% over the projected period. In an effort to contrast the erosion of households’ purchasing power, the minimum wage was raised by 30% in July 2022, six months after a 50% increase. A further 55% increase was announced for 2023. Market conditions remain challenging, particularly among females and the youth. Wage inequality and the size of the informal sector remain long-standing problems. In 2022, the IMF estimated the country’s GDP per capita (PPP) at USD 38,759, 28.1% below the EU average.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 905.841,154.601,340.691,402.111,454.23
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 10,62213,38415,36815,89916,317
General Government Balance (in % of GDP) -3.1-6.4-4.4-3.8-3.7
General Government Gross Debt (in % of GDP) 31.734.431.932.231.5
Inflation Rate (%) n/a51.262.552.548.1
Unemployment Rate (% of the Labour Force) 10.39.910.110.210.2
Current Account (billions USD) -48.41-48.51-40.10-39.26-39.57
Current Account (in % of GDP) -5.3-4.2-3.0-2.8-2.7

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

The agricultural sector constitutes 5.5% of Turkey’s GDP. Despite employing 18% of the 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 figures from Turkstat, in 2022 cereals production increased by 15.7% when compared with the previous year (to 36.9 million tonnes), same as for that of wheat (+10.5% - 19.5 million tonnes), maize (+3.7% - 7 million tonnes), barley (+47.8% - 8.5 million tonnes), and fruits, beverage and spices crops (+4.6% - 26.1 million tonnes).

The secondary sector accounts for 31.1% of GDP and employs 25% 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.
The services sector has grown rapidly in the early 2000s, peaking at 59% of GDP in 2009 but has fallen since to account for 52.8% of GDP in 2021, while employing 57% of the country’s workforce (World Bank, latest data available). Tourism represents nearly 4% 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: in the January-October period, 39.6 million foreign tourists visited the country, marking an 88% increase from the same period one year earlier. The sector’s target for 2023 has been set at 60 million visitors and USD 56 billion in tourism revenues. The Turkish banking sector 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

Presidency of Strategy and Budget
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: November 2023