Skyline at golden hour in Turkey

Turkey Economy

Turkey economic overview

Rapid recent growth:

Turkey, a transcontinental nation bridging Asia and Europe, boasts an economy with a GDP worth over USD 900 billion and a population of over 85 million. GDP growth in the decade to 2023 was rapid at around 5% annually, and Turkey was one of the few large economies in the world to continue expanding in 2020 despite the COVID-19 pandemic.

A diversified economy:

While services make up the largest share of the economy—with tourism services particularly key—Turkey also has a sizable manufacturing sector worth over 20% of GDP. Automobiles, textiles, refined oil and jewellery are important exports. Agriculture represents around 6% of GDP, with major products including grains, fruits and vegetables.

Trade relations:

Turkey entered a customs union with the European Union in 1995, though the union does not cover agricultural products. Further economic integration with the EU has been paralyzed for years due to fears in Western capitals about migration and the rule of law, and is like to remain so in the coming years.

Unorthodox economic policies:

In recent years, monetary policy has been extremely loose due to President Erdogan's preference for low interest rates. This has translated into a collapsing lira and some of the world's highest inflation rates, which have weighed on purchasing power and investor sentiment. That said, monetary policy has become more conventional since Erdogan's May 2023 election win, with interest rates more than quadrupling between May and December 2023.

Economic challenges:

Apart from extremely high inflation and a lack of confidence in the local currency, Turkey also suffers from rule of law concerns. The country has become more authoritarian in recent years, with political power tightly concentrated with the President. Moreover, a large and persistent current account deficit, low international reserves and large foreign currency liabilities mean there is a risk of a balance of payments crisis.

Turkey's economic outlook:

The country's rapid population growth, growing consumer market, strategic location between Europe and Asia, large tourism potential and a young and entrepreneurial population will support economic activity in the coming years, though concerns over institutions and the rule of law will cap momentum.

Turkey's economy in numbers:

Nominal GDP of USD 905 billion in 2022.

GDP per capita of USD 10,607 compared to the global average of USD 10,589.

Average real GDP growth of 5.3% over the last decade.

Share of the region's population
Share of the region's GDP

Economic structure:

In 2021, services accounted for 63% of overall GDP, manufacturing 22%, other industrial activity 9%, and agriculture 6%. Looking at GDP by expenditure, private consumption accounted for 55% of GDP in 2021, government consumption 13%, fixed investment 32%, and net exports 0%.

GDP by economic sector
GDP by type of expenditure

International trade:

In 2021, manufactured products made up 77% of total merchandise exports, mineral fuels 4%, food 11%, ores and metals 5% and agricultural raw materials 1%, with other categories accounting for 2% of the total. In the same period, manufactured products made up 60% of total merchandise imports, mineral fuels 6%, food 6%, ores and metals 10% and agricultural raw materials 3%, with other goods accounting for 15% of the total. Total exports were worth USD 253 billion in 2022, while total imports were USD 343 billion.

Key exports
Key imports
Key export partners
Key import partners

Economic growth:

The economy recorded average annual growth of 5.3% in the decade to 2022. To read more about GDP growth in Turkey, go to our dedicated page.

Fiscal policy:

Turkey's fiscal deficit averaged 1.8% of GDP in the decade to 2022. Find out more on our dedicated page.

Unemployment:

The unemployment rate averaged 10.9% in the decade to 2022. For more information on Turkey's unemployment click here.

Inflation:

Inflation averaged 17.0% in the decade to 2022. Go to our Turkey inflation page for extra insight.

Monetary Policy:

Turkey's monetary policy rate ended 2022 at 9.00%, up from 5.50% a decade earlier. See our Turkey monetary policy page for additional details.

Exchange Rate:

From end-2012 to end-2022 the lira weakened by 90.4% vs the U.S. dollar. For more info on the lira, click here.
GDP growth accelerated in sequential terms in Q1, spurred by rebounds in fixed investment, public spending and exports. On the flip side, private consumption expanded at a slower pace. Shifting to Q2, our panelists expect quarter-on-quarter growth to have slowed to a halt, and available data backs this projection. Economic sentiment eased from Q1’s average, while industrial output plunged month-on-month in April due to a marked decline in manufacturing production. Moreover, PMI data indicates that the sector lost further steam in May. In other news, in June, the government ruled out a mid-year minimum wage rise, likely to avoid fueling inflation further. Moreover, lawmakers have drafted new tax proposals worth around USD 7 billion targeting companies, with the aim of strengthening the fiscal balance after last year’s extraordinary spending due to a devastating earthquake.
Projections out to 2033.

51 indicators covered including both annual and quarterly frequencies.

Consensus Forecasts based on a panel of 44 expert analysts.

Want to get insight on the economic outlook for Turkey in the coming years? FocusEconomics collects projections out to 2033 on 51 economic indicators for Turkey from a panel of 44 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Turkey economy. To download a sample report on the Turkey's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.

Turkey Economic Data

2019 2020 2021 2022 2023
Population (million) 83.2 83.6 84.7 85.3 86.3
GDP (USD bn) 760 719 814 905 1,104
GDP per capita (USD) 9,137 8,595 9,609 10,607 12,795
GDP (EUR bn) 679 630 688 861 1,021
GDP per capita (EUR) 8,163 7,539 8,129 10,092 11,835
GDP (TRY bn) 4,318 5,049 7,256 15,012 26,276
Economic Growth (Nominal GDP, ann. var. %) 14.8 16.9 43.7 106.9 75.0
Economic Growth (GDP, ann. var. %) 0.8 1.9 11.4 5.5 4.5
Domestic Demand (ann. var. %) -1.6 7.4 6.4 5.1 8.0
Private Consumption (ann. var. %) 1.5 3.2 15.4 19.0 12.8
Government Consumption (ann. var. %) 3.9 2.2 3.0 4.2 5.2
Fixed Investment (ann. var. %) -12.5 7.3 7.2 1.3 8.9
Exports (G&S, ann. var. %) 5.3 -14.6 25.1 9.9 -2.7
Imports (G&S, ann. var. %) -5.0 6.8 1.7 8.6 11.7
Industrial Production (ann. var. %) -0.7 1.7 17.8 4.4 1.8
Retail Sales (annual variation in %) -0.2 5.1 14.6 13.2 23.3
Unemployment (s.a. % of active population) 13.4 12.6 11.0 10.3 8.8
Unemployment (% of active population, aop) 13.7 13.1 12.0 10.5 9.4
Fiscal Balance (% of GDP) -2.9 -3.4 -2.8 -0.9 -5.2
Public Debt (% of GDP) 32.4 39.4 40.4 30.8 29.6
Money (ann. var. of M2 %) 25.6 35.6 52.2 62.3 65.8
Inflation (CPI, ann. var. %, eop) 11.8 14.6 36.1 64.3 64.8
Inflation (CPI, ann. var. %, aop) 15.2 12.3 19.6 72.3 53.9
Inflation (Core, ann. var. %, eop) 9.8 14.3 31.9 51.9 70.6
Inflation (PPI, ann. var. %, eop) 7.4 25.1 79.9 97.7 44.2
1-Week Repo Rate (%, eop) 12.00 17.00 14.00 9.00 42.50
10-Year Bond Yield (%, eop) 12.00 12.51 23.05 9.87 23.69
Stock Market (ann. var. of BIST %) 25.4 29.1 25.8 196.6 35.6
Exchange Rate (TRY per USD, eop) 5.95 7.43 13.28 18.72 29.53
Exchange Rate (TRY per USD, aop) 5.68 7.02 8.92 16.59 23.80
Exchange Rate (TRY per EUR, eop) 6.68 9.09 15.10 19.98 32.62
Exchange Rate (TRY per EUR, aop) 6.36 8.01 10.54 17.44 25.74
Current Account Balance (USD bn) 15.0 -31.1 -6.4 -45.8 -45.0
Current Account Balance (% of GDP) 2.0 -4.3 -0.8 -5.1 -4.1
Merchandise Trade Balance (USD bn) -16.8 -37.9 -29.3 -89.6 -86.9
Merchandise Exports (USD bn) 182 168 225 253 251
Merchandise Imports (USD bn) 199 206 254 343 338
Merchandise Exports (ann. var. %) 1.8 -7.6 33.4 12.8 -1.0
Merchandise Imports (ann. var. %) -9.4 3.7 23.1 35.0 -1.5
Foreign Direct Investment (USD bn) 9.5 7.7 11.5 13.4 10.4
International Reserves (USD bn) 78.6 50.0 72.7 82.9 92.7
International Reserves (months of imports) 4.7 2.9 3.4 2.9 3.3
External Debt (USD bn) 414 429 435 457 500
External Debt (% of GDP) 54.5 59.6 53.5 50.5 45.3

Q&A:

  1. Is Turkey a powerful economy?

  2. Turkey has a large and relatively strong economy. It is classified as an upper-middle-income country by the World Bank and is a member of the G20 and the OECD. Turkey's economy is diversified, with strengths in manufacturing, agriculture, and tourism. However, it also faces challenges, including high inflation and external imbalances.

  3. What kind of economy does Turkey have?

  4. Turkey has a mixed economy with a blend of modern industry and commerce alongside traditional agriculture. It's characterized by a strong private sector, significant state involvement in key industries, and an emerging market status.

  5. What is the biggest contributor to Turkish GDP?

  6. The service sector is the biggest contributor to Turkish GDP, encompassing areas like tourism, banking, and retail. This sector is followed by industry, including manufacturing and construction, with agriculture also playing a notable role, though smaller in comparison to services and industry.

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