The Turkish economy has shown remarkable performance with its steady growth over the last eight years. A sound macroeconomic strategy in combination with prudent fiscal policies and major structural reforms in effect since 2002 has integrated the Turkish economy into the globalized world, while transforming the country into one of the major recipients of FDI in its region.
The structural reforms, hastened by Turkey’s EU accession process, have paved the way for comprehensive changes in a number of areas. The main objectives of these efforts were to increase the role of the private sector in the Turkish economy, to enhance the efficiency and resiliency of the financial sector, and to place the social security system on a more solid foundation. As these reforms have strengthened the macroeconomic fundamentals of the country, the economy grew with an average annual real GDP growth rate of 5 percent over the past decade between 2002 and 2012.
Average Annual Real GDP Growth (%) 2002-2012
Source: OECD, Eurostat and national sources
Moreover, Turkey’s impressive economic performance over the past decade has encouraged experts and international institutions to make confident projections about Turkey’s economic future. For example, according to the OECD, Turkey is expected to be the fastest growing economy of the OECD members during 2012-2017, with an annual average growth rate of 5.2 percent.
Annual Average Real GDP Growth (%) Forecast in
OECD Countries 2012-2017
Source: OECD Economic Outlook No: 91, June 2012
Together with stable economic growth, Turkey has also reined in its public finances; the EU-defined general government nominal debt stock fell to 36.1 percent from 74 percent in a period of nine years between 2002 and 2012. Hence, Turkey has been meeting the “60 percent EU Maastricht criteria” for public debt stock since 2004. Similarly, during 2002-2012, the budget deficit decreased from more than 10 percent to less than 3 percent, which is one of the EU Maastricht criteria for the budget balance.
As the GDP levels more than tripled to USD 786 billion in 2012, up from USD 231 billion in 2002, GDP per capita soared to USD 10,504, up from USD 3,500 in the given period.
The visible improvements in the Turkish economy have also boosted foreign trade, while exports reached USD 153 billion by the end of 2012, up from USD 36 billion in 2002. Similarly, tourism revenues, which were around USD 8.5 billion in 2002, exceeded USD 25 billion in 2012.
Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy, the 16th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures (at PPP) in 2012.
- Institutionalized economy fueled by USD 123 billion of FDI in the past decade and 13th most attractive FDI destination in the world (2012 A.T. Kearney FDI Confidence Index).
- 16th largest economy in the world and 6th largest economy compared with EU countries in 2012 (GDP at PPP, IMF-WEO).
- Robust economic growth over the last decade with an average annual real GDP growth of 5 percent.
- GDP reached USD 786 billion in 2012, up from USD 231 billion in 2002.
- Sound economic policies with a prudent fiscal discipline.
- Strong financial structure resilient to the global financial crisis.