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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Turkish economy was struck by Covid-19, particularly after March 2020 as the country went into a nationwide lockdown, with some of Europe's strictest measures against the breakout of the pandemic. The government sought to mitigate the effects of Covid-19 by loosening its monetary policy, extending credit and delving into its foreign reserves. This strategy allowed a strong rebound of the economy, GDP growth reaching an estimated 9% in 2021 (IMF), boosted by dynamic exports. According to IMF forecast, GDP growth should return to a lower trend but remain firm in 2022 and 2023 (3.3%). Inflation, currency volatility and unorthodox policy are among the downside risks to the outlook (Focus Economics).

Turkey’s recovery from the COVID-19 pandemic crisis has been ‘remarkable’ (IMF), the country being  among the few countries not to dive into recession. Turkey's strong hospital infrastructure limited the extent of Covid-19 cases and deaths, and the large interest rate cuts, rapid credit provision by state-owned banks, administrative and regulatory credit incentives, and extensive liquidity buoyed growth (IMF). However, this expansionary monetary stance resulted in interest rates falling below market expectations, a rapid decline in the value of the lira and shrinking foreign reserves. The government took an almost complete U-turn in November 2020, appointing a new chairman to the central bank as well as a new finance minister, and shifting towards a firm monetary policy stance to rein inflation. Nonetheless, cuts in interest rates pushed the lira to record lows at the end of 2021, causing inflation to reach a near two-decade high of 36% in December. According to IMF estimates, inflation soared to 17% in 2021, and is expected to remain high in 2022 (15.4%) and 2023 (12.8%). As direct fiscal support has been modest, public debt remained contained below 40% GDP, reaching 37.8% GDP in 2021. It is expected to increase to 37.9% GDP in 2022 and 39% GDP in 2023 (IMF). Fiscal policy remained tight, with public deficit amounting to -2.9% GDP in 2021 and forecasted to be stable in 2022 and 2023 (-2.9% GDP). The authorities are pursuing relaxed monetary and exchange rate policies to improve exports’ competitiveness. Among the main challenges are large external financing needs, a heavily indebted private sector and a weak lira (The Economics Intelligence Unit). According to the OECD, pursuing a credible monetary policy and implementing structural reforms should be a priority.

The unemployment rate, which had reached 13.7% in 2019, was further impacted by the Covid-19 pandemic as most businesses remained closed for months whereas tourism - a major source of employment - took a nosedive. Employment partially recovered along with the rebound in economic activity, but expanded more rapidly in export-oriented manufacturing than in services (OECD). According to IMF estimates, unemployment rate decreased to 12.2% in 2021, and is forecast to further fall to 11% in 2022 and 10.5% in 2023. Market conditions remain challenging, particularly among females and the youth. Wage inequality and the size of the informal sector remain as long-standing problems.

Main Indicators 202020212022 (e)2023 (e)2024 (e)
GDP (billions USD) 720.11817.51e853.49941.551.00
GDP (Constant Prices, Annual % Change) 1.911.4e5.03.03.0
GDP per Capita (USD) 89e91011
General Government Balance (in % of GDP) -5.0-5.1-5.9-6.5-6.6
General Government Gross Debt (in % of GDP) 39.741.837.537.739.6
Inflation Rate (%) 12.319.673.151.224.2
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -35.54-13.59-48.26-36.51-27.14
Current Account (in % of GDP) -4.9-1.7-5.7-3.9-2.6

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

The agricultural sector constitutes 6.7% of Turkey’s GDP. Despite employing 18% of the 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 the shrinking animal breeding sector. Mineral resources are abundant, but under-exploited. Turkey's recent discovery of natural gas resources in the Black Sea could help increase the share of mineral activity in economy in the near future.

Manufacturing is the main industrial activity of the country. Secondary sector accounts for 28% of GDP and employs 25% of the workforce. The Turkish government gives special priority to large infrastructure projects, particularly in the transport sector, through Build-Operate-Transfer (BOT) project financing model. Car manufacturing and textile spearhead the Turkish industry.

The services sector has grown rapidly in early 2000s, peaking at 59% of GDP in 2009 but has fallen since to account for 54.2% of GDP in 2020, while employing 57% of the country’s workforce (World Bank). Tourism represents nearly 4% of GDP and is a major source of foreign currency for the nation. However, Turkey’s tourism income has narrowed significantly in 2020 as the COVID-19 pandemic led to worldwide travel restrictions, border shutdowns, and an overall drop in consumer demand. According to estimates by the Turkish Ministry of Tourism and Culture, the number of tourists decreased by around 72% in 2020 compared to 2019. The sector rebounded in 2021, as in the January-November 2021 period, the number of foreign visitors increased by 89,61% compared to the previous year.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 18.1 25.3 56.6
Value Added (in % of GDP) 5.5 31.1 52.8
Value Added (Annual % Change) -2.9 12.5 12.7

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Turkish Lira (TRY) - Average Annual Exchange Rate For 1 USD 3.023.654.835.707.01

Source: World Bank - Latest available data.



Foreign Trade

Turkey’s economy is open to foreign trade, which represents 61% of its GDP (World Bank, 2020). Automobile (10.8% of total exports including passenger cars, transport vehicles and accessories for vehicles) and petroleum oils products (2.2%) were top exports of Turkey in 2020, followed by jewellery, gold, iron, steel and textile products. The main imported products were gold (11.5%), motor cars and accessories (6% in total), petroleum oils (2.9%), ferrous waste (2.8%) and electrical apparatus (1.5%) (Comtrade). Turkey's volume of exports and imports declined sharply in 2020 mainly due to the Covid-19 pandemic, but rebounded in 2021. According to IMF data, the volume of exports of goods and services increased by 21.4% in 2021, while imports grew by 3.4%. Exports are forecast to rise at a slower rate in 2022 (7%), while imports are expected to accelerate (10.4%).

Germany (9.4% of all exports), the United Kingdom (6.6%), the United States (6%), Iraq (5.4%) and Italy (4.8%) and were among the top destinations for Turkish exports. China (10.5%), Germany (9.9%) and Russia (8.1%) were the main supplier of goods in Turkey, followed by the United States (5.3%) and Italy (4.2%). Turkey has 22 active free trade agreements (FTAs), including its very first trade deal with the European Economic Area in 1991 and the most recent one with the United Kingdom, which entered into force on 1 January 2021. Trade agreements with Qatar, Lebanon and Sudan are also expected to enter into force soon. At the same time, Turkey has pursued FTA negotiations with Ukraine, Japan, Thailand and Indonesia and will start renegotiating the terms of its existing agreements with Georgia, Malaysia and Moldova. The United States imposed additional duties on imports of Turkish steel in August 2018 but they were reduced back to 25% in May 2019. The hike was found illegal by the US Court of International Trade in 2020. However, the EU started to impose duties on Turkish iron and steel imports in January 2021. The US-EU tariff deal reached in October 2021 could impact Turkish steel exports to the US.

Turkish trade structure has been characterised by a wide deficit (USD 37.9 billion in 2020 according to World Bank data) mainly due to energy imports. Also, as most of its exports are tied to imports of intermediate, semi-finished or raw products, the evolution of trade balance has been traditionally linked to economic growth and the lira's value against the US dollar. In 2020, Turkey's imports of goods totalled USD 219.5 billion, whereas the total value of its exported goods reached USD 169.7 billion (WTO). According to WTO, exports of services in 2020 were higher than imports, USD 34.6 billion and USD 24.8 billion respectively. The government has maintained an active policy of incentivising the use of locally sourced fuel for power generation by supporting renewables and domestic coal-fired production in order to reduce the country's reliance on gas imports. At the same time, the currency crisis, which brought the value of Turkish lira to historic lows, pressured imports and boosted exports. According to the Turkish Ministry of Trade, Turkish exports reached USD 225 billion in 2021 (+32.8% compared with 2020) while its imports rose to USD 271 billion (+23.6%).

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 233,800231,152210,345219,515271,426
Exports of Goods (million USD) 156,993177,169180,833169,651225,218
Imports of Services (million USD) 22,66827,37126,86024,76531,602
Exports of Services (million USD) 43,38457,84962,81034,57358,153

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 55.862.662.761.070.8
Trade Balance (million USD) -58,575-40,726-16,781-37,863-29,313
Trade Balance (Including Service) (million USD) -31,752-9,83821,779-23,5042,499
Imports of Goods and Services (Annual % Change) 10.6-6.2-
Exports of Goods and Services (Annual % Change)
Imports of Goods and Services (in % of GDP) 29.731.430.232.235.5
Exports of Goods and Services (in % of GDP)

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change) 2.68.911.210.310.3

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
Turkey is a member of the following international economic organisations: G-20, WTO, IMF, Pacific Alliance (observer), OECD, ICC, among others. For the full list of economic and other international organisations in which participates Turkey click here. International organisation membership of Turkey is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Turkey can be consulted here.

Main Partner Countries

Main Customers
(% of Exports)
Germany 8.6%
United States 6.5%
United Kingdom 6.1%
Italy 5.1%
Spain 4.3%
See More Countries 69.4%
Main Suppliers
(% of Imports)
China 11.9%
Germany 8.0%
United States 4.8%
Italy 4.3%
India 2.9%
See More Countries 68.1%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
President : Recep Tayyip Erdoğan (since August 2014) - AKP
Head of Government:  President Recep Tayyip ERDOGAN (since August 2014); a 2017 constitutional referendum eliminated the post of prime minister after the 2018 general election
Next Election Dates
Presidential : June 2023
Legislative: June 2023
Current Political Context
In November 2020, Turkish President Recep Tayyip Erdogan appointed Naci Agbal as the new chairman of the country's central bank while removing Berat Albayrak - his son-in-law - from the office as Minister of Treasury and Finance. This came after the government's economic policies came under criticism during Albayrak's tenure and as the independence of the central bank was put into question by Erdogan's repeated interventions. As inflation nonetheless soared to record highs in 2021, the popularity of Erdogan eroded and protests erupted. Internationally, Turkey is embroiled in several regional conflicts (including in Syria, Libya, Iraq and the Nagorno-Karabakh) and its relations with the West are tumultuous. Relations with the EU, which deteriorated in 2020 following Turkey’s gas exploration in Greek and Cypriot waters, were re-established in 2021. The Turkey-EU migration deal agreed in 2016, which ensures that asylum seekers who arrive on EU shores are resettled in Turkey in exchange for EU funding, was renewed in March. In 2020, after a number of Turkish troops had been killed in airstrikes in Syria’s northern Idlib province, the government declared that Turkey would no longer stop refugees from entering Europe. Turkey hosts the largest refugee population in the world, close to 4 million, an estimated 3.6 million of whom are Syrian refugees (European Parliament). In September, Erdogan declared that Turkey intended to buy a second batch of S-400 missile defence systems from Russia, risking additional sanctions from the US that had already questioned its membership from NATO. In the context of increased tensions between Russia and Ukraine, it is nonetheless in Turkey’s interests to maintain ties with Ukraine, as the country is a critical supplier of defence equipment.
Main Political Parties
- 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' Democratic Party (HDP): pro-minority, left-wing, socialist and democratic
- Nationalist Movement Party (MHP): nationalist party
- The Good Party (IYI Parti): Nationalist, Conservatist
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.


COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Turkey, please visit the dedicated portal from the Turkish Ministry of Health.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in the Turkey and the current sanitary measures in vigour, please consult the official platform about COVID-19 of the Ministry of Health (in Turkish). Further updates in English can be found on the website of the US embassy in Turkey.

Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.


Import & export restrictions

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the dedicated section on the website of the Turkish Customs Authority (in Turkish). Further details can be found on the “Customs measures” section on KPMG's Turkish website.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Turkey on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the Turkish government to address the impact of the COVID-19 pandemic on the national economy, consult the website of the Central Bank of the Republic of Turkey and the report by White & Case. Further information can be found on the dedicated page on the KPMG website.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Hungarian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Hungary in the
IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme and taxation measures established by the Turkish government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the overview of the so-called “Economic Stability Shield” provided by the Turkish news agency Anadolu. For further details on the package developed to support small and medium enterprises refer to the country-report by White & Case .
For a general overview of international SME support policy responses to the COVID-19 outbreak 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.

Support plan for exporters

For the up-to-date information on possible support plans for exporters in Turkey, if applicable, please consult the website of the Central Bank of the Republic of Turkey.  The Turkish Customs Authority provides an overview of the national export support measures (in Turkish).