Turkey: Economy Overview

Turkey's dynamic economy is a complex mix of modern industry and commerce along with a traditional agriculture sector that still accounts for about 30% of employment. It has a strong and rapidly growing private sector, yet the state remains a major participant in basic industry, banking, transport, and communication.

Economy - overview:

The largest industrial sector is textiles and clothing, which accounts for one-third of industrial employment; it faces stiff competition in international markets with the end of the global quota system. However, other sectors, notably the automotive and electronics industries, are rising in importance within Turkey's export mix.

Real GNP growth has exceeded 6% in many years, but this strong expansion has been interrupted by sharp declines in output in 1994, 1999, and 2001. The economy turned around with the implementation of economic reforms, and 2004 GDP growth reached 9%, followed by roughly 5% annual growth from 2005-07. Due to global contractions, annual growth is estimated to have fallen to 1.5% in 2008. Inflation fell to 7.7% in 2005 - a 30-year low - but climbed to over 10% in 2008.

Despite the strong economic gains from 2002-07, which were largely due to renewed investor interest in emerging markets, IMF backing, and tighter fiscal policy, the economy is still burdened by a high current account deficit and high external debt. Further economic and judicial reforms and prospective EU membership are expected to boost foreign direct investment. The stock value of FDI currently stands at about $85 billion. Privatization sales are currently approaching $21 billion. Oil began to flow through the Baku-Tblisi-Ceyhan pipeline in May 2006, marking a major milestone that will bring up to 1 million barrels per day from the Caspian to market. In 2007 and 2008, Turkish financial markets weathered significant domestic political turmoil, including turbulence sparked by controversy over the selection of former Foreign Minister Abdullah GUL as Turkey's 11th president and the possible closure of the Justice and Development Party (AKP). Economic fundamentals are sound, marked by moderate economic growth and foreign direct investment. Nevertheless, the Turkish economy may be faced with more negative economic indicators in 2009 as a result of the global economic slowdown. In addition, Turkey's high current account deficit leaves the economy vulnerable to destabilizing shifts in investor confidence.

GDP (purchasing power parity):

$902.7 billion (2008 est.)
country comparison to the world: 17
$892.8 billion (2007 est.)
$853.6 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate):

$729.4 billion (2008)

GDP - real growth rate:

1.1% (2008 est.)
country comparison to the world: 173
4.6% (2007 est.)
6.9% (2006 est.)

GDP - per capita (PPP):

$11,900 (2008 est.)

country comparison to the world: 92

$11,900 (2007 est.)

$11,600 (2006 est.)

note: data are in 2008 US dollars

GDP - composition by sector:

agriculture: 8.8%
industry: 27.5%
services: 63.8% (2008 est.)

Labor force:

24.06 million (2008)
country comparison to the world: 26

Labor force - by occupation:

agriculture: 29.5%
industry: 24.7%
services: 45.8% (2007 est.)

Unemployment rate:

10.7% (2008 est.)
country comparison to the world: 128
9.9% (2007 est.)

Investment (gross fixed):

20.3% of GDP (2008 est.)
country comparison to the world: 104

Budget:

revenues: $160.5 billion
expenditures: $173.6 billion (2008 est.)

Inflation rate (consumer prices):

10.4% (2008 est.)
country comparison to the world: 153
8.7% (2007 est.)

Agriculture - products:

tobacco, cotton, grain, olives, sugar beets, hazelnuts, pulse, citrus; livestock

Industries:

textiles, food processing, autos, electronics, mining (coal, chromite, copper, boron), steel, petroleum, construction, lumber, paper

Industrial production growth rate:

-0.6% (2008 est.)
country comparison to the world: 138

Oil - production:

42,800 bbl/day (2007 est.)
country comparison to the world: 64

Natural gas - production:

893 million cu m (2007 est.)
country comparison to the world: 65

Current account balance:

$-41.6 billion (2008 est.)
country comparison to the world: 183
$-37.7 billion (2007 est.)

Exports:

$140.8 billion (2008 est.)
country comparison to the world: 32
$115.4 billion (2007 est.)

Exports - commodities:

apparel, foodstuffs, textiles, metal manufactures, transport equipment

Exports - partners:

Germany 9.8%, UK 6.2%, UAE 6%, Italy 5.9%, France 5%, Russia 4.9% (2008)

Imports:

$193.9 billion (2008 est.)
country comparison to the world: 22
$162 billion (2007 est.)

Imports - commodities:

machinery, chemicals, semi-finished goods, fuels, transport equipment

Imports - partners:

Russia 15.5%, Germany 9.3%, China 7.8%, US 5.9%, Italy 5.5%, France 4.5%, Iran 4.1% (2008)

Debt - external:

$277.1 billion (31 December 2008)
country comparison to the world: 26
$249.4 billion (31 December 2007)

Stock of direct foreign investment - at home:

$128.7 billion (31 December 2008 est.)
country comparison to the world: 26
$110.5 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad:

$13.56 billion (2008 est.)
country comparison to the world: 41
$10.97 billion (31 December 2007 est.)

Exchange rates:

Turkish liras (TRY) per US dollar - 1.3179 (2008 est.), 1.319 (2007), 1.4286 (2006), 1.3436 (2005), 1.4255 (2004) note: on 1 January 2005, the old Turkish lira (TRL) was converted to new Turkish lira (TRY) at a rate of 1,000,000 old to 1 new Turkish lira; on 1 January 2009, the Turkish government dropped the word "new" and the currency is now called simply the Turkish lira

Source: CIA - The World Factbook