After going through a serious economic and political crisis in 2001, Turkey recovered dramatically thanks to a more favorable political climate but also because of monetary, fiscal and structural reforms instilled by the World Bank and IMF. With growth estimated at 7.5% in 2011, which was driven by strong consumption, Turkey was rapidly recovering from the global financial crisis of 2008/2009. Despite the slowdown due to the unfavorable international environment, the economy again performed well in 2012, as opposed to the country's European neighbors. Growth slowed down in 2013, reaching only 2.2% due to the slowing down of the global economy, the crisis in the EU -- the main trading partner of Turkey -- geopolitical tensions and the sharp rise in oil prices. A stronger growth is expected in 2014 (4%), driven by foreign trade, consumption and credit.
Despite its enviable position, characterized by a low level of debt and a low budget deficit (1.9% of GDP), the Turkish economy is showing signs of vulnerability. Growth has slowed and inflation has reached 7.7%, due to the depreciation of the pound (a 13% fall compared to the euro), economic overheating and rising oil prices. The current account deficit is growing (7.4% of GDP). The country's dependence on capital inflows makes the economy highly vulnerable to external shocks. Monetary policy pursued by the government aims to counter the devaluation of the currency and restrict consumer credit and speculative investments. Household debt and the trade deficit are also issues of concern. The 2014 budget, with a deficit of USD 15.2 billion, aims to decrease the current account deficit through increased savings, redirection of existing resources towards productive areas, maintaining sound public finances, and stimulating growth and employment. The combined budget of defense, security and intelligence has been increased by 9.4% compared to 2012. The largest part of the 2014 budget is allocated to education spending (budget increased by 15%), followed by healthcare. Among the challenges facing the government are the Syrian political crisis which blocks the expansion of foreign trade to the Middle East, the crisis in the eurozone to which the Turkish economy is closely linked, and the country's energy dependence.
The unemployment rate, which soared due to the economic crisis of 2008/2009, has now declined (under 10%), however unemployment exceeds 18% among the young. Turkey is characterized by the existence of a large informal sector and income inequality remains strong.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||774.73||788.61||819.99e||813.32e||861.08|
|GDP (Constant Prices, Annual % Change)||8.8||2.1||4.1||3.0e||3.0|
|GDP per Capita (USD)||10,476||10,531||10||10,518||11,018|
|General Government Balance (in % of GDP)||-2.7||-3.3||-4.4||-4.3||-3.5|
|General Government Gross Debt (in % of GDP)||39.1||36.2||36.3||33.6e||33.1|
|Inflation Rate (%)||6.5||8.9||7.5e||9.0e||7.0|
|Unemployment Rate (% of the Labor Force)||9.1||8.4||9.0||9.5||9.9|
|Current Account (billions USD)||-75.08||-48.50||-65.11e||-47.55e||-51.50|
|Current Account (in % of GDP)||-9.7||-6.2||-7.9e||-5.8e||-6.0|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
Agriculture in Turkey, which contributes nearly 10% of the GDP and employs nearly a quarter of the population, still suffers from low productivity because of its management system (small farms). 11% of the country's territory is cultivated. Wheat is the main crop. The country is the third biggest exporter of tobacco in the world and the leading producer of hazelnuts (70% of world production). Mineral resources are abundant but under-exploited.
The manufacturing industry, the main industrial activity of the country, makes up nearly 30% of the GDP and commands almost 26% of the workforce, with the textile and automobile sectors being the main activities. The Turkish government gives special priority to large infrastructure projects, particularly in the transport sector, which mostly function under the BOT model (build, operate, transfer).
The tertiary sector contributes at least two-thirds to the GDP. Tourism represents 4% of the GDP with about 31 million tourists a year and almost 22 milion in profits, thus making it one of the key sources of foreign currency for the country. Turkey is one of the ten most visited countries in the world.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||23.6||26.0||50.4|
|Value Added (in % of GDP)||8.5||27.1||64.4|
|Value Added (Annual % Change)||3.5||4.0||4.3|
Source: World Bank - Last Available Data.
|Turkish New Lira (TRY) - Average Annual Exchange Rate For 1 USD||1.55||1.50||1.67||1.80||1.90|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Turkey's economy is open to foreign trade, which represents nearly 55% of GDP (average 2008-2010).
The spearheads of Turkish foreign trade are the automobile and textile industries. Next in order are the agricultural and food products industry, machinery, electronic equipment, steel, and chemicals. The European Union is by far its largest customer, followed by USA, China and Iraq. The country has a large trade deficit because of its strong energy dependence, particularly on Russia and the Middle East.
Due to its dependency on the imports of intermediate goods for production, Turkey has a growing trade deficit, despite a steady increase in exports, which have a relatively low added value. The country has suffered from the crisis in the euro zone, which is the destination for a third of its exports, as well as from the unstable political situation in the Middle East. In 2013, the Turkish deficit increased by 18.7% compared to 2012, reaching 99.78 billion USD, due to the exports of gold reaching export levels (an increase of 150%) in the course of the year (these were meant for Iran as a payment for oil and gas imports while avoiding the banking circuits).
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||140,928||185,544||240,842||236,545||251,651|
|Exports of Goods (million USD)||102,143||113,883||134,907||152,469||151,812|
|Imports of Services (million USD)||15,544||18,159||19,420||19,285||22,269|
|Exports of Services (million USD)||32,626||34,521||38,465||40,621||43,713|
|Imports of Goods and Services (Annual % Change)||-14.3||20.7||10.7||-0.4||9.0|
|Exports of Goods and Services (Annual % Change)||-5.0||3.4||7.9||16.3||-0.3|
|Imports of Goods and Services (in % of GDP)||24.4||26.8||32.6||31.5||32.2|
|Exports of Goods and Services (in % of GDP)||23.3||21.2||24.0||26.3||25.6|
|Trade Balance (million USD)||-24,768||-56,324||-89,037||-65,235||-79,820|
|Trade Balance (Including Service) (million USD)||-6,225||-39,729||-68,985||-42,769||-56,937|
|Foreign Trade (in % of GDP)||47.7||48.0||56.6||57.8||57.9|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||68.3%|
(% of Imports)
|See More Countries||60.5%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2013|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||4.5%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||3.9%|
|Bars and rods, of iron or non-alloy steel, not...Bars and rods, of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but incl. those twisted after rolling (excl. in irregularly wound coils)||3.2%|
|Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s.||2.6%|
|Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab||2.5%|
|See More Products||83.2%|
|- bn USD of products imported in 2013|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||6.1%|
|Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form||6.0%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||3.6%|
|Ferrous waste and scrap; remelting scrap ingots of...Ferrous waste and scrap; remelting scrap ingots of iron or steel (excl. slag, scale and other waste from the production of iron or steel; radioactive waste and scrap; fragments of pigs, blocks or other primary forms of pig iron or spiegeleisen)||3.0%|
|Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s.||1.9%|
|See More Products||79.3%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2011|
|Personal travelPersonal travel||51.38%|
|Health-related expenditureHealth-related expenditure||1.06%|
|Education-related expenditureEducation-related expenditure||0.59%|
|Business travelBusiness travel||7.67%|
|Air transportAir transport||19.12%|
|Road transportRoad transport||5.10%|
|Sea transportSea transport||3.20%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||3.25%|
|Construction abroadConstruction abroad||3.19%|
|Freight insuranceFreight insurance||1.43%|
|Auxiliary servicesAuxiliary services||0.55%|
|Other direct insuranceOther direct insurance||0.06%|
|Life insurance and pension fundingLife insurance and pension funding||0.04%|
|Telecommunications servicesTelecommunications services||1.16%|
|Postal and courier servicesPostal and courier services||0.19%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.56%|
|Other trade-related servicesOther trade-related services||0.30%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||0.16%|
|Other business servicesOther business services||0.12%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||0.04%|
|Legal servicesLegal services||0.04%|
|Operational leasing servicesOperational leasing services||0.05%|
|Information servicesInformation services||0.05%|
|News agency servicesNews agency services||0.05%|
|- bn USD of services imported in 2011|
|Sea transportSea transport||23.75%|
|Air transportAir transport||13.90%|
|Road transportRoad transport||2.44%|
|Rail transportRail transport||0.22%|
|Personal travelPersonal travel||14.92%|
|Education-related expenditureEducation-related expenditure||2.03%|
|Health-related expenditureHealth-related expenditure||1.21%|
|Business travelBusiness travel||8.79%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||6.74%|
|Other business servicesOther business services||6.10%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.40%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||0.19%|
|Legal servicesLegal services||0.19%|
|Architectural, engineering,...Architectural, engineering, and other technical services||0.04%|
|Operational leasing servicesOperational leasing services||1.24%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.25%|
|Other trade-related servicesOther trade-related services||0.25%|
|Freight insuranceFreight insurance||3.15%|
|Auxiliary servicesAuxiliary services||0.20%|
|Construction abroadConstruction abroad||1.94%|
|Telecommunications servicesTelecommunications services||1.41%|
|Postal and courier servicesPostal and courier services||0.21%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.40%|
|Information servicesInformation services||0.18%|
|News agency servicesNews agency services||0.18%|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014