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Economic Outlook 

Turkey’s economy has performed remarkably well with its steady growth over the past 15 years. A sound macroeconomic strategy, prudent fiscal policies, and major structural reforms have all contributed to the integration of Turkey’s economy into the world at large, while also transforming the country into one of the major recipients of FDI in its region.

 

These reforms have increased the role of the private sector in Turkey’s economy, have placed public finance on a more solid foundation, and have enhanced the efficiency and resiliency of the financial sector. Together these strengthened the macroeconomic fundamentals of the country, which allowed the economy to grow at an annual average real GDP growth rate of 5.8 percent from 2003 to 2017.

 

Annual Average Real GDP Growth (%) 2003-2017

Source: OECD Quarterly National Accounts, 2018

 

Turkey’s impressive economic performance over the past 15 years has encouraged experts and international institutions to draw confident projections about the country’s economic future. For example, according to the OECD, Turkey is expected to be one of the fastest growing economies among OECD members during 2015-2025, with an annual average growth rate of 4.9 percent.

 

Annual Average Real GDP Growth (%) Forecast in OECD Countries 2015-2025 (USD at 2010 PPP)

Source: OECD

 

Together with stable economic growth, Turkey has also reined in its public finances; the EU-defined general government nominal debt stock fell to 28.3 percent in 2017 from 72.1 percent in 2002. Turkey has been meeting the EU’s 60 percent Maastricht criteria for public debt stock since 2004. Similarly, during 2002-2017, the budget deficit decreased from more than 10 percent to less than 3 percent as a ratio to GDP, which is also one of the EU Maastricht criteria for the budget balance.

 

GDP levels increased to USD 851 billion in 2017, up from USD 238 billion in 2002, which saw GDP per capita hit USD 10,537, up from USD 3,589 in 2002.

 

The visible improvements in Turkey’s economy have also boosted foreign trade. Exports reached around USD 157 billion by the end of 2017, up from USD 36 billion in 2002. Meanwhile, tourism revenues, which were around USD 12.4 billion in 2002, exceeded USD 22 billion in 2017.

 

Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy. It is the 17th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures in 2017.

 

  • Institutionalized economy fueled by around USD 193 billion of FDI in the past 15 years
  • 17th largest economy in the world and 6th largest economy compared with EU countries in 2017 (GDP, IMF)
  • Robust economic growth with an annual average real GDP growth of 5.8 percent during 2003-2017
  • GDP reached USD 851 billion in 2017, up from USD 238 billion in 2002
  • Sound economic policies with prudent fiscal discipline
  • Strong financial structure that is resilient to global financial crises