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Turkey Economy Profile 2017

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Economy - overviewTurkey's largely free-market economy is driven by its industry and, increasingly, service sectors, although its traditional agriculture sector still accounts for about 25% of employment. The automotive, petrochemical, and electronics industries have risen in importance and surpassed the traditional textiles and clothing sectors within Turkey's export mix. However, the recent period of political stability and economic dynamism has given way to domestic uncertainty and security concerns which are generating financial market volatility and weighing on Turkey’s economic outlook.

Current government policies emphasize populist spending measures and credit breaks, while implementation of structural economic reforms has slowed. The government is playing a more active role in some strategic sectors and has used economic institutions and regulators to target political opponents, undermining private sector confidence in the judicial system. Between July 2016 and March 2017, three credit ratings agencies downgraded Turkey’s sovereign credit ratings, citing concerns about the rule of law and the pace of economic reforms.
Current government policies emphasize populist spending measures and credit breaks, while implementation of structural economic reforms has slowed. The government is playing a more active role in some strategic sectors and has used economic institutions and regulators to target political opponents, undermining private sector confidence in the judicial system. Between July 2016 and March 2017, three credit ratings agencies downgraded Turkey’s sovereign credit ratings, citing concerns about the rule of law and the pace of economic reforms.
Turkey remains highly dependent on imported oil and gas but is pursuing energy relationships with a broader set of international partners and taking steps to increase use of domestic energy sources including renewables, nuclear, and coal. The joint Turkish-Azerbaijani Trans-Anatolian Natural Gas Pipeline (TANAP) is moving forward to increase transport of Caspian gas to Turkey and Europe, and when completed will help diversify Turkey's sources of imported gas.

After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country's economic fundamentals and ushered in an era of strong growth averaging more than 6% annually until 2008. An aggressive privatization program also reduced state involvement in basic industry, banking, transport, power generation, and communication. Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey's well-regulated financial markets and banking system helped the country weather the global financial crisis, and GDP growth rebounded to around 9% in 2010-11, as exports and investment recovered following the crisis.

Since 2014, productivity and growth has slowed to reveal persistent underlying imbalances in the Turkish economy. In particular, Turkey’s low domestic savings and large current account deficit means it must rely on external investment inflows to finance growth, leaving the economy vulnerable to destabilizing shifts in investor confidence. The economy contracted in the third quarter of 2016 for the first time since 2009, in part due to a sharp decline in the tourism sector, and growth is likely to remain below potential in 2017. Other troublesome trends include rising unemployment and elevated inflation, which is likely to increase in 2017 given the Turkish lira’s recent depreciation against the dollar. Although government debt remains low at about 32% of GDP, bank and corporate borrowing has almost tripled as a percent of GDP during the past decade, outpacing its emerging-market peers and prompting investor concerns about its long-term sustainability.
GDP (purchasing power parity)$1.698 trillion (2016 est.)
$1.65 trillion (2015 est.)
$1.555 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$856.8 billion (2016 est.)
GDP - real growth rate2.9% (2016 est.)
6.1% (2015 est.)
5.2% (2014 est.)
GDP - per capita (PPP)$21,100 (2016 est.)
$20,700 (2015 est.)
$20,100 (2014 est.)
note: data are in 2016 dollars
Gross national saving13% of GDP (2016 est.)
14.5% of GDP (2015 est.)
15% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 59.5%
government consumption: 14.7%
investment in fixed capital: 29.8%
investment in inventories: 3%
exports of goods and services: 16.7%
imports of goods and services: -23.2% (2016 est.)
GDP - composition by sectoragriculture: 6.1%
industry: 28.5%
services: 65.5% (2016 est.)
Population below poverty line21.9% (2015 est.)
Labor force30.54 million
note: about 1.2 million Turks work abroad (2016 est.)
Labor force - by occupationagriculture: 18.4%
industry: 26.6%
services: 54.9% (2016)
Unemployment rate10.9% (2016 est.)
9.2% (2014 est.)
Unemployment, youth ages 15-24total: 17.8%
male: 16.6%
female: 20.2% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 2.1%
highest 10%: 30.3% (2008)
Distribution of family income - Gini index40.2 (2010)
43.6 (2003)
Budgetrevenues: $146.4 billion
expenditures: $151 billion (2016 est.)
Taxes and other revenues17.1% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-0.5% of GDP (2016 est.)
Public debt29.5% of GDP (2016 est.)
34.7% of GDP (2015 est.)
note: data cover central government debt, and excludes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are sold at public auctions
Inflation rate (consumer prices)8.5% (2016 est.)
7.7% (2015 est.)
Central bank discount rate5.25% (31 December 2011)
15% (22 December 2009)
Commercial bank prime lending rate15.2% (31 December 2016 est.)
13.66% (31 December 2015 est.)
Stock of narrow money$119.4 billion (31 December 2016 est.)
$107.1 billion (31 December 2015 est.)
Stock of broad money$474.7 billion (31 December 2014 est.)
$425.1 billion (31 December 2013 est.)
Stock of domestic credit$611.7 billion (31 December 2016 est.)
$581.8 billion (31 December 2015 est.)
Market value of publicly traded shares$188.9 billion (31 December 2015 est.)
$219.8 billion (31 December 2014 est.)
$195.7 billion (31 December 2013 est.)
Agriculture - productstobacco, cotton, grain, olives, sugar beets, hazelnuts, pulses, citrus; livestock
Industriestextiles, food processing, automobiles, electronics, mining (coal, chromate, copper, boron), steel, petroleum, construction, lumber, paper
Industrial production growth rate1.3% (2016 est.)
Current Account Balance-$32.6 billion (2016 est.)
-$32.12 billion (2015 est.)
Exports$143.8 billion (2015 est.)
$157.6 billion (2014 est.)
Exports - commoditiesapparel, foodstuffs, textiles, metal manufactures, transport equipment
Exports - partnersGermany 9.3%, UK 7.3%, Iraq 5.9%, Italy 4.8%, US 4.5%, France 4.1% (2015)
Imports$142.5 billion (2016 est.)
$207.2 billion (2015 est.)
Imports - commoditiesmachinery, chemicals, semi-finished goods, fuels, transport equipment
Imports - partnersChina 12%, Germany 10.3%, Russia 9.8%, US 5.4%, Italy 5.1% (2015)
Reserves of foreign exchange and gold$115 billion (31 December 2016 est.)
$110.5 billion (31 December 2015 est.)
Debt - external$410.4 billion (31 December 2016 est.)
$397.8 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$198.4 billion (31 December 2016 est.)
$185.9 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$53.07 billion (31 December 2016 est.)
$45.57 billion (31 December 2015 est.)
Exchange ratesTurkish liras (TRY) per US dollar -
3.5 (2016 est.)
2.72 (2015 est.)
2.72 (2014 est.)
2.1885 (2013 est.)
1.8 (2012 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on July 9, 2017

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