Turkey Economic Forecast

Turkey Economic Outlook

March 10, 2020

The economy strengthened markedly and by more than expected in the fourth quarter, with GDP growing at the quickest pace in nearly two years on resurgent domestic demand amid a surge in private consumption—due to lower interest rates, a credit impulse and a supportive base effect. However, net exports dragged on growth as the rise in domestic demand was accompanied by skyrocketing import growth while exports increased only modestly. Data for the first quarter of 2020, meanwhile, points to another strong outturn. Consumer credit growth jumped to a near six-year high in January and hints at continued strong private consumption growth in the quarter, despite an uptick in inflation and a slight easing in consumer sentiment. Moreover, business confidence rose in January and February, while the manufacturing PMI has moved further into expansionary territory and reached a two-year high in February.

Turkey Economic Growth

Although economic growth should strengthen this year on recovering domestic demand amid looser monetary policy and a supportive base effect, the balance of risks remains skewed to the downside. The external sector should weigh on the economy due to a rise in imports, while global trade and geopolitical tensions, and the coronavirus outbreak, further cloud the outlook. FocusEconomics Consensus Forecast panelists project the economy to expand 3.1% in 2020, which is up 0.2 percentage points from last month, and 3.2% in 2021.

Turkey Economy Data

2014 2015 2016 2017 2018
Population (million)77.778.779.880.882.0
GDP per capita (USD)12,02610,89810,80510,5569,384
GDP (USD bn)934858862853770
Economic Growth (GDP, annual variation in %)5.26.13.27.52.8
Domestic Demand (annual variation in %)3.25.44.47.2-0.8
Consumption (annual variation in %)3.05.43.76.20.0
Investment (annual variation in %)5.19.32.28.2-0.6
Industrial Production (annual variation in %)5.76.13.49.11.1
Unemployment Rate9.910.310.910.911.0
Fiscal Balance (% of GDP)-1.1-0.9-1.0-1.6-2.0
Public Debt (% of GDP)28.827.628.328.230.1
Money (annual variation in %)11.917.417.615.519.4
Inflation Rate (CPI, annual variation in %, eop)8.28.88.511.920.3
Inflation Rate (CPI, annual variation in %)8.97.77.811.116.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)8.257.508.008.0024.00
Stock Market (annual variation in %)-  -  -  -  -  
Exchange Rate (vs USD)2.332.923.533.795.29
Exchange Rate (vs USD, aop)2.192.733.023.654.84
Current Account (% of GDP)-4.7-3.8-3.7-5.5-3.7
Current Account Balance (USD bn)-43.6-32.4-31.5-46.6-28.3
Trade Balance (USD billion)-63.6-48.7-39.7-58.5-43.0
Exports (USD billion)169155153169179
Imports (USD billion)233204193228222
Exports (annual variation in %)4.4-10.7-1.410.65.5
Imports (annual variation in %)-3.8-14.6-5.418.2-2.7
International Reserves (USD)10792.992.184.272.9
External Debt (% of GDP)43.546.747.553.357.3

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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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