Turkey Economic Forecast

Turkey Economic Outlook

January 11, 2022

The economy grew at a robust pace in the third quarter, despite cooling notably from the second quarter. The slowdown was driven by a softer expansion in household spending amid rising price pressures, while capital outlays contracted. The external sector contributed positively as exports increased at a strong pace amid an influx of tourists. Data for Q4 suggests that activity remained resilient at the outset of the period. Growth in industrial output and retail sales eased in October, but remained solid nonetheless. Moreover, the unemployment rate ticked down to a four-month low in the same month. However, consumer sentiment turned notably more pessimistic in the quarter and inflation reached a near two-decade high in December, weighing on household spending. Moreover, the economy experienced a tumultuous end to the year with significant lira volatility, which could see inflation rise further.

Turkey Economic Growth

Economic growth should ease this year, after a strong showing in 2021. Fixed investment should be buoyed by elevated business confidence and higher capacity utilization rates, while normalizing economic conditions should support household spending. However, red-hot inflation, currency volatility and unorthodox policy pose key downside risks to the outlook. FocusEconomics Consensus Forecast panelists project the economy to expand 3.4% in 2022, which is down 0.3 percentage points from last month, and 3.7% in 2023.

Turkey Economy Data

2015 2016 2017 2018 2019
Population (million)78.779.880.882.083.0
GDP per capita (USD)10,89810,80510,5569,3849,078
GDP (USD bn)858862853770754
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Unemployment Rate10.310.910.911.013.7
Fiscal Balance (% of GDP)-1.0-1.1-1.5-2.0-2.9
Public Debt (% of GDP)27.528.228.230.433.1
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)-3.2-3.1-4.8-2.71.2
Current Account Balance (USD bn)-27.3-26.9-40.6-20.88.7
Trade Balance (USD billion)-49.0-39.9-58.6-40.8-16.7
Exports (USD billion)155153169179182
Imports (USD billion)204193228220199
Exports (annual variation in %)-10.6-1.410.85.71.9
Imports (annual variation in %)-15.0-5.518.3-3.6-9.4
International Reserves (USD)92.992.184.272.978.6
External Debt (% of GDP)46.647.453.357.758.0

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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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