Over the past 10 years, the Turkish economy has grown at one of the fastest and most prosperous rates which resulted in a growth in GDP values of Turkey as well. In this article, Turkish GDP growth in recent years is explained.
According to the Turkish state website invest.gov.tr, macroeconomic strategies, fiscal policies and structural reforms have brought stability and security to the Turkish financial sector. Thanks to this stability, Turkey has been able to rank among the countries in its region with the highest FDI (foreign direct investment) figures in recent years.
Nevertheless, 2019 will be marked by negative GDP growth in Turkey due to the collapse of the pound since last year. Turkish GDP growth had so far shown exemplary results with an average annual rate of 5.3% between 2003 and 2016. This rate had even been ranked among the best in the world during this period.
Let’s see how this was distributed over the country’s activity in 2017.
GDP by sector in Turkey
In 2017, Turkish GDP by sectors was estimated as follows:
– Agriculture accounts for 6.8% of Turkish GDP
This sector, which, according to the Société Générale study on Turkey, employs nearly 19% of the population, is in constant decline and suffers from a decline in productivity, too. The 11% of land used for agriculture mainly produces wheat, tobacco, and hazelnuts but is not enough to supply the country whose imports, particularly in livestock, are growing exponentially.
– The industry represents 32.3% of Turkish GDP
Turkey has a rich industry that maintains constant and stable growth. The workforce and local know-how allow Turkish industry to stand out while being competitive. Very large infrastructure projects also allow the industry to constantly evolve. The automotive sector, as well as the textile sector, are the two main areas of Turkish industry.
– Services represent 60.7% of Turkish GDP
Globalization and the modernization of the country have strongly elevated the service sector since the early 2000s to undergo a significant decline and then stabilization after 2010. The sector which employs 58% of the Turkish workforce also includes the tourism sector which, after having experienced a significant decline, is returning to the forefront with significant growth which directly affects the Turkish GDP growth.
In 2019, the most active and prosperous Turkish sectors were textiles, automotive, construction, software, jewelry, and chemicals.
Future and forecasts
According to the OECD, Turkey’s growth is expected to be one of the most dynamic between 2015 and 2025 with an average annual rate of 4.9% and its foreign trade should be stimulated. In times of recession, Turkey’s economic performance and Turkish GDP growth are now lower than in previous years (estimated at 0.4% for 2019) but satisfactory given the crisis it is experiencing. Gita Gopinath, head of economic affairs at the IMF, estimates that 2020 will be a better year for Turkey’s economy, which should “emerge from its recession”. In her view, any aid would be “useless”, as the country could recover on its own, focusing in particular on greater transparency.
For further reading, you can have a look at our article about why you should invest in Turkey.
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