Turkey Economic Forecast

Turkey Economic Outlook

October 5, 2021

Data for Q3 suggests that the economy continued to grow solidly, albeit at a slower pace than in Q2 amid a less favorable base effect. In July, industrial output growth lost notable steam on an annual basis, while retail sales also expanded at a softer rate and the unemployment rate rose. Looking at the quarter as a whole, business confidence increased on average, likely influenced by an improved demand outlook amid the relaxation of restrictive measures. Moreover, the manufacturing PMI averaged higher in Q3, highlighting that operating conditions improved at a stronger pace, while a rising capacity utilization rate bodes well for output ahead. That said, the upbeat readings are seemingly masking some fragility in the economy: Inflation continued to rise through August and currency volatility returned at the tail end of the quarter, which will weigh on activity.

Turkey Economic Growth

The economy is forecast to shift into a lower gear in 2022. While a further relaxation of lockdown measures at home and abroad should support aggregate demand, elevated price pressures, renewed pressure on the lira and a frail external position will weigh on momentum. FocusEconomics Consensus Forecast panelists project the economy to expand 8.1% in 2021 and 3.7% in 2022, which is up 0.1 percentage points from last month’s forecast.

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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