Turkey Economic Forecast

Turkey Economic Outlook

May 12, 2020

The economy seemed to firm up in the first two months of the year before the Covid-19 pandemic hit, with industrial production and retail sales growing strongly in January–February. Retail trade like benefited from strong consumer credit growth in the quarter and a slight downtick in unemployment through February, while the industrial sector benefited from sturdy manufacturing activity. However, the economy has since received a severe blow due to the health crisis and containment measures: The manufacturing PMI fell to a record low in April after entering contractionary territory in March, while the sector’s capacity utilization rate fell to an 11-year low in April. Moreover, business sentiment soured in the same month to the lowest level since February 2009, and consumer confidence fell to a survey-record low. More positively, the gradual lifting of restrictions from May should revive activity somewhat.

Turkey Economic Growth

GDP is expected to shrink notably this year owing to the Covid-19 pandemic. Exports and tourism are likely to suffer and weaken the country’s external position, while domestic containment measures will limit economic activity at home. While fiscal stimulus could soften the impact somewhat, a recession looks inevitable. FocusEconomics Consensus Forecast panelists project the economy to contract 3.2% in 2020, which is down 2.9 percentage points from last month, and to expand 4.7% in 2021.

Turkey Economy Data

2015 2016 2017 2018 2019
Population (million)78.779.880.882.083.0
GDP per capita (USD)10,89810,80510,5569,384-  
GDP (USD bn)858862853770-  
Economic Growth (GDP, annual variation in %)6.13.27.52.8-  
Domestic Demand (annual variation in %)5.44.47.2-0.8-  
Consumption (annual variation in %)5.43.76.20.0-  
Investment (annual variation in %)9.32.28.2-0.6-  
Industrial Production (annual variation in %)6.13.49.11.1-0.6
Unemployment Rate10.310.910.911.013.7
Fiscal Balance (% of GDP)-0.9-1.0-1.6-2.0-  
Public Debt (% of GDP)27.628.328.230.1-  
Money (annual variation in %)17.417.615.519.426.6
Inflation Rate (CPI, annual variation in %, eop)8.88.511.920.311.8
Inflation Rate (CPI, annual variation in %)7.77.811.116.315.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)7.508.008.0024.0012.00
Stock Market (annual variation in %)-  -  -  -  -  
Exchange Rate (vs USD)2.923.533.795.295.95
Exchange Rate (vs USD, aop)2.733.023.654.845.68
Current Account (% of GDP)-3.8-3.7-5.5-3.7-  
Current Account Balance (USD bn)-32.4-31.5-46.6-28.31.7
Trade Balance (USD billion)-48.7-39.7-58.5-43.0-18.7
Exports (USD billion)155153169179182
Imports (USD billion)204193228222201
Exports (annual variation in %)-10.7-1.410.65.52.0
Imports (annual variation in %)-14.6-5.418.2-2.7-9.4
International Reserves (USD)92.992.184.272.978.6
External Debt (% of GDP)46.747.553.357.3-  

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Turkey Facts

Value Change Date
Bond Yield12.00-0.09 %Dec 31
Exchange Rate5.95-0.85 %Jan 01

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