Economic and Political Overview

flag Türkiye Türkiye: Economic and Political Overview

In this page: Economic Outline | Political Outline | COVID-19 Country Response


Economic Outline

Economic Overview

Turkish growth rebounded strongly from the initial impact of the pandemic, reflecting a dynamic private sector and stimulative policies, the country being among the few countries not to dive into recession. Turkey’s growth was buoyant in 2022 (+5.5%) and continued expanding in 2023 as sizeable pre-election stimulus further boosted domestic demand. For the year as a whole, the IMF estimated GDP growth at 4%, with household consumption as the main driver, coupled with government consumption and upbeat investment in machinery and equipment; whereas the contribution of net exports was negative. Following the March 2024 local election period, private consumption is expected to make a lesser contribution to growth. In contrast, government expenses are anticipated to maintain a positive impact, primarily driven by reconstruction following the February 2023 earthquakes (estimated at approximately USD 26 billion) and potential additional expenditures preceding the local elections. Overall, the IMF forecasts a GDP growth of around 3% over the forecast horizon.

Fiscal policy remained supportive in the first half of 2023. However, following the general and presidential elections in May, the authorities have gradually intensified the monetary policy position, leading to a doubling of the policy rate from June to September, reaching 30%. Additionally, the government has implemented numerous substantial tax hikes aimed at mitigating the substantial budget deficit and funding expenditures related to earthquake reconstruction. The government deficit was estimated at 6.4% of GDP in 2023 and is expected to remain high this year (4.4%) before declining marginally in 2025 (3.8%). Despite such a deficit, the substantial snowball effect stemming from elevated inflation contributed to keeping the government debt-to-GDP ratio near its 2022 level, notwithstanding the influence of lira depreciation, although the share of foreign-currency-denominated debt at end-July remained high at 67.1% (Fitch Ratings). Despite the adoption of a more restrictive policy stance, the expectation is that inflation – at 51.2% in 2023 - will remain elevated in the short term. This is attributed to factors such as inflation inertia, persistently high inflation expectations, and the repercussions of recent lira depreciation and tax increases. The gradual adjustment of excessive domestic demand is expected to play a role in a moderate reduction in inflation and the gradual improvement of external imbalances.

According to IMF estimates, employment partially recovered along with the rebound in economic activity, hence the unemployment rate decreased to 9.9% in 2023, its lowest level in nearly a decade, and is forecast to stabilize at around 10% over the projected period. Market conditions remain challenging, particularly among females and the youth. Wage inequality and the size of the informal sector remain long-standing problems. In 2023, the IMF estimated the country’s GDP per capita (PPP) at USD 41,888, 26.4% below the EU average.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 905.841,108.451,113.561,106.921,153.49
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 10,62212,84912,76512,55112,943
General Government Balance (in % of GDP) -2.0-2.7-4.4-3.6-3.1
General Government Gross Debt (in % of GDP) 30.828.930.931.032.0
Inflation Rate (%) 72.353.959.538.422.4
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -49.09-45.15-30.87-24.21-20.10
Current Account (in % of GDP) -5.4-4.1-2.8-2.2-1.7

Source: IMF – World Economic Outlook Database, Latest data available.

Note : (E) Estimated data


Main Sectors of Industry

The agricultural sector constitutes 6.5% of Turkey’s GDP. Despite employing 17% of the active population, the sector continues to suffer from low productivity due to reliance on small farms. Approximately 11% of Turkey’s territory is used as agricultural land. Wheat is the country’s main crop, though Turkey is the world’s third-largest exporter of tobacco and the largest producer of hazelnuts (nearly 70% of global production). Turkey continues to be a net exporter of agricultural products, but livestock imports are growing exponentially to compensate for the shrinking animal breeding sector. Mineral resources are abundant but under-exploited. According to the latest estimates from Turkstat, in 2023 cereals production increased by 7.4% when compared with the previous year (to 41.5 million tonnes), same as for that of wheat (+10.4% - 21.8 million tonnes), barley (+5.9% - 9 million tonnes), and fruits, beverage and spices crops (+2.2% - 27.4 million tonnes).

The secondary sector accounts for 31.3% of GDP and employs 27% of the workforce. Manufacturing is the main industrial activity of the country, accounting for 22% of GDP (World Bank). Car manufacturing and textile spearhead the Turkish industry, and other important segments are food products, basic metals and fabricated metal products, plastic products, chemicals, and electrical equipment. Turkey is the fifth-largest textile exporter in the world. The iron and steel sector in Turkey is of great importance for the general performance of the manufacturing industry due to its increasing production capacity, export potential and the inputs it provides to other sectors. In 2022, the value of manufacturing exports in Turkey reached an all-time high of USD 185.9 billion, accounting for 73.1% of total exports.

The services sector grew rapidly in the early 2000s, peaking at above 57% of GDP in 2009 but has fallen since to account for 51.7% of GDP in 2022, while employing 56% of the country’s workforce (World Bank, latest data available). Tourism represents around 7% of GDP and is a major source of foreign currency for the nation. Although the sector was severely affected during the COVID-19 pandemic, it recovered in 2022, when 45 million foreign visitors visited the country, which recorded its highest tourism revenue in history, at USD 46.3 billion (data Invest Turkey). As per the Turkish banking sector, it is comprised of 53 banks: 34 deposit banks (of which three are state-owned), 13 development and investment banks, and 6 participation banks (European Banking Federation).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 17.1 26.5 56.3
Value Added (in % of GDP) 6.5 31.9 51.2
Value Added (Annual % Change) 0.6 0.9 9.7

Source: World Bank, Latest data available.


Find more information about your business sector on our service Market Reports.

Indicator of Economic Freedom


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, labour 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.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


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.

World Rank:

Source: The Economist - Business Environment Rankings 2014-2018


Country Risk

See the country risk analysis provided by Coface.


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Political Outline

Current Political Leaders
President: Recep Tayyip Erdoğan (since August 2014)
Next Election Dates
Presidential: 2028
Legislative: 2028
Current Political Context
Turkey held presidential and parliamentary elections on May 14, 2023. The ruling Justice and Development Party (AKP) and its allies won a majority in the parliamentary elections, but President Recep Tayyip Erdoğan fell short of an outright majority in the presidential elections. A second round was held on May 28, which Erdoğan won by a narrow margin.
Although being part of NATO (with the second largest army of the Alliance after the U.S.), Turkish President Recep Tayyip Erdogan tried to maintain a neutral stance towards Russia and there have been tensions inside the Alliance as Turkey opposed Finland and Sweden's talks to join NATO. The objections centred on accusations that the two countries harboured Kurdish militants who are considered terrorists by Turkey. Finally, the parliament voted to approve the applications of the two Nordic countries.
Turkey has restored its relations with the United Arab Emirates and the two countries have signed 13 cooperation agreements in various sectors. Furthermore, Erdogan put an effort into normalizing diplomatic relations with Saudi Arabia. On the other hand, despite the fact that Turkey's relations with Israel improved in recent years, with the two countries agreeing on the resumption of diplomatic ties, tensions with the Jewish country escalated after Hamas’ terrorist attack on Israel and the retaliation of the latter, with Erdogan severely condemning the invasion of Gaza.
Main Political Parties
The main political parties represented in the Turkish parliament are:
- Justice and Development Party (AKP): centre-right, primary leading party, socially conservative
- Republican People’s Party (CHP): centre-left, primary opposition party based on social-republican values
- Peoples' Equality and Democracy Party (DEM): pro-Kurdish, left-libertarian, formerly known as Party of the Greens and the Left Future
- Peoples' Democratic Party (HDP): pro-minority, left-wing, socialist and democratic
- Nationalist Movement Party (MHP): nationalist party, allied of the AKP
- The Good Party (IYI): nationalist, conservatist
- New Welfare Party (YRP): far-right, Islamist
- Workers' Party of Turkey (TIP): socialist, left to far-left.
Type of State
Turkey is a parliamentary presidential republic.
Executive Power
The President of the Republic is the head of state and the head of the government. He or she is elected by direct universal suffrage for a five-year term of office. The President has the function of an arbitrator (promulgation of laws, signature of decrees) and appoints the Council of Ministers. The President also appoints the judicial organs and other governmental organs. The position of Prime Minister was abolished following the constitutional referendum of April 2017.
Legislative Power
Legislative power in Turkey is unicameral. The Parliament, called the Grand National Assembly of Turkey, has 600 seats and its members are elected by universal suffrage for five years, according to a system of proportional representation.

Indicator of Freedom of the Press


The world rankings, published annually, measures 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 incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. 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.).

World Rank:

Indicator of Political Freedom


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.

Partly Free
Political Freedom:
Civil Liberties:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Turkey please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.


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Latest Update: July 2024