Turkey Economic Forecast

Turkey Economic Outlook

November 3, 2020

Available data continues to point to an economic recovery in the third quarter. Industrial output rebounded strongly in July–August on an annual basis from the steep fall logged in Q2, amid surging manufacturing production, which grew at the sharpest rate in over two years in August. Moreover, business confidence swung to optimistic territory in the quarter as the general business climate improved and export expectations turned rosy. However, household spending likely remained relatively subdued, despite consumer credit growth picking up notable steam in the quarter, as consumer confidence did not improve and inflation remained elevated. In the political arena, Finance Minister Berat Albayrak presented the new economic program for 2021–2023. The program—which envisages 5.8% GDP growth next year—focuses on strengthening innovation, value-added production and exports to drive growth.

Turkey Economic Growth

Following the sharpest contraction in over a decade this year, the economy should recover notably next year as the impact of the pandemic and associated containment measures fades and domestic and foreign demand strengthen. That said, the balance of risks is tilted to the downside amid lingering currency weakness, elevated inflation and a fragile external position. FocusEconomics Consensus Forecast panelists project the economy to expand 4.3% in 2021, which is down 0.1 percentage points from last month’s projection, and 4.1% in 2022.

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 %)6.13.27.52.80.9
Domestic Demand (annual variation in %)5.44.47.2-0.8-1.4
Consumption (annual variation in %)5.43.76.20.00.7
Investment (annual variation in %)9.32.28.2-0.6-12.4
Industrial Production (annual variation in %)6.13.49.11.1-0.6
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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