Turkey Economic Forecast

Turkey Economic Outlook

January 14, 2020

The economic landscape has improved somewhat in recent months as the economy returned to growth on an annual basis for the first time in a year in the third quarter. This came on the back of solid public consumption growth and a revival of private consumption, buttressed by a strong credit impulse amid laxer monetary policy. However, recovering domestic activity led to a surge in imports in the quarter, and the external sector consequently weighed on the economy. Turning to the final quarter of 2019, annual economic growth should have accelerated further, partly due to a supportive base effect. Moreover, annual industrial output and retail sales grew at strong clips in October, while business sentiment returned to optimism in the quarter. Less positively, despite a slight improvement relative to Q3 the manufacturing PMI remained below the 50-threshold, signifying tough operating conditions in the sector.

Turkey Economic Growth

This year the economy should continue growing owing to a weak base effect and the impetus provided by looser monetary policy. However, as domestic demand gains traction, the external sector will likely weigh on the economy as imports outweigh exports. Moreover, risks remain tilted to the downside as geopolitical tensions and market volatility linger. FocusEconomics Consensus Forecast panelists expect the economy to expand 2.8% in 2020, which is up 0.2 percentage points from last month, and 3.1% in 2021.

Turkey Economy Data

2014 2015 2016 2017 2018
Population (million)76.777.778.779.880.8
GDP per capita (USD)12,38612,02610,89810,80510,542
GDP (USD bn)950934858862852
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 Rate9.09.910.310.910.9
Fiscal Balance (% of GDP)-1.0-1.1-1.0-1.1-1.5
Public Debt (% of GDP)31.428.827.628.328.3
Money (annual variation in %)22.211.917.118.315.7
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)4.508.257.508.008.00
Stock Market (annual variation in %)-  -  -  -  -  
Exchange Rate (vs USD)2.152.332.923.533.79
Exchange Rate (vs USD, aop)1.912.192.733.023.65
Current Account (% of GDP)-6.7-4.7-3.7-3.8-5.6
Current Account Balance (USD bn)-63.6-43.6-32.2-33.1-47.4
Trade Balance (USD billion)-79.9-63.6-48.1-40.9-59.0
Exports (USD billion)162169152150166
Imports (USD billion)242233200191225
Exports (annual variation in %)-0.14.4-10.0-1.210.7
Imports (annual variation in %)6.3-3.8-13.9-4.517.8
International Reserves (USD)11110792.992.184.2
External Debt (% of GDP)41.443.546.747.553.5

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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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