The Turkish economy has achieved an outstanding performance with its steady growth over the last 15 years. Sound macroeconomic strategies, prudent fiscal and monetary policies, structural reforms pursued throughout this timeframe resulted in high rates of growth and increased confidence in the Turkish economy.
We have an expansive domestic market, competitive and dynamic private sector, highly developed technological infrastructure in transportation, telecommunications and energy sectors.
Economic Growth
According to the World Economic Outlook Report of the World Bank issued in April 2017, on the basis of the purchasing power parity (PPP), Turkish economy is the 13th largest in the world and 5th largest in Europe in 2016.
Turkish economy has achieved to grow by 11.1 % in the third quarter of 2017. In the first half of 2017, the overall economic growth was recorded 5.1 %. 3.9 % of this economic growth comes from investments and exports, proving the quality of our economic growth. For the first three quarters of 2017 the total economic growth has reached 7.4 %. Türkiye has taken the first place among the OECD, EU and G20 countries according to the economic growth rate in the first three quarters of 2017.Overall economic growth rate for 2017 is expected to be around 6,5 – 7 %. Our country will thus continue to take the first place according to overall economic growth rate among the OECD and G20 countries.
According to the targets of the Medium-Term Programme (MTP) 2018-2020, Türkiye aims to grow 5.5 % for successive three years. With regard to the estimates of OECD, Türkiye will be one of the fastest growing economies in the period of 2015-2025 with the average annual growth rate of 4.9 %.
Turkish people has been victorious in the test of democracy given against the hideous coup attempt in 2016. Despite this difficult process, Turkish economy managed to maintain its strength. Especially after the second quarter of 2017, the international credit rating agencies were obliged to review their estimates for the growth rate of the Turkish economy. Recently, OECD has increased its estimate regarding the growth rate of Türkiye for the year 2017 to 6 %.
Foreign Trade
Our country had an overall trade volume of 342 billion USD in 2016, 143 billion USD coming from exports and 199 billion USD from imports. In the period 2005-2016 the average growth rate of Turkish exports was 6.4 %, whereas, it was globally 4.3 %. Türkiye’s exports are estimated to reach 153.3 billion USD in 2017, 170 billion USD in 2018 and 193.1 billion USD in 2019. Our exports are now foreseen to reach 156 billion USD, surpassing the targeted level of 153.3 billion USD.
Türkiye has a trade volume of approximately 160 billion USD with the European Union. Türkiye is the fourth trade partner of the European Union, whereas the European Union is the first trade partner of Türkiye. The Customs Union with the European Union encompasses only industrial goods and processed agricultural products. In case of the Customs Union’s modernization with the inclusion of other sectors, Türkiye - European Union trade volume will significantly increase. An analysis recently carried out by the European Union shows the positive effects that will be generated in the case of the updating of the Customs Union.
A similar research was conducted by Türkiye in 2016. According to the results of the mentioned research, the updating of the Customs Union would contribute to the economic growth of the European Union.
Foreign Trade of Türkiye (billion $)
2010 2011 2012 2013 2014 2015 2016
Exports 113,9 134,9 152,6 151,8 157,6 143,9 143
Imports 185,5 240,8 236,5 251,7 242,1 207,2 199
Trade
Volume 299,4 375,7 389,1 403,5 399,7 351,1 342
Source: TÜİK
Foreign Direct Investments (FDI)
Furthermore, ranking 71st in global competition index in 2002 Türkiye rose to the 55st place in 2017. Accordingly, Türkiye has managed to attract 176.6 billion USD worth of foreign direct investments (FDI) between 2003 and 2016. In 2016, FDI figure was 12.3 billion USD despite the ongoing regional tensions.
Türkiye is the biggest foreign direct investment appealing country in West Asia since 2012. In 2017, between January and October 8,29 billion USD worth of foreign investment were attracted.
Legislation offering equal rights and duties among foreign and local investors offers a secure environment for investments.
Our geograhic location provides the possibility of reaching over 60 countries with a market of 1,5 billion persons through a 4-hour plane trip from İstanbul.
57.649 overseas companies with foreing capital are operating in Türkiye. The number of the companies operating in Türkiye with Turkish and foreign partnerships is 34.573.
Türkiye has established an impressive investment incentive system. Turkish government has obtained the necessary authorization from the Turkish Grand National Assembly in order to promote foreign investments according to the needs of every project. Upon request, Turkish government is eager to meet with the foreign investors and discuss the investment incentives that will satisfy their needs.
Privatization
Privatization has been among the Government’s top priorities. The main philosophy of privatization is to confine the role of the state in areas such as health, basic education, social security, national defense, and large scale infrastructure investments. This is in line with Türkiye’s target of creating a truly competitive market economy driven by the private sector.
Türkiye has been listed among the top OECD countries that swiftly realized the privatization process and got the highest level of revenue from it. Privatization revenues for the period 1986-2003 were 8 billion Dollars and 58 billion Dollars between 2004 and 2015, resulting in a total revenue of 66 billion Dollars between 1986 and 2015.
Block sales of the public shares in 94 institutions were implemented between 18 November 2002 and 25 July 2017.
Privatization of 10 harbours, 81 power plants, 40 facilities and enterprises, 3483 real estates, 3 ships and 36 mines were carried out in the form of public and equity offerings in the Stock Exchange Market of İstanbul.
The total revenue out of the privatization programmes done between 18 November 2002 and 25 July 2017 reached 59 billion 558 million 255 thousand USD.
Turkish Contracting Services Abroad
Turkish construction sector is ranked as the second in the world after PRC.
The first construction project was undertaken in 1972 in Libya. Until July 2017, 9018 projects were realized in 117 countries with a total amount of 344.7 billion USD.
Between 2008 and 2017, 4152 projects were undertaken. The total amount of these projects equals to 220.1 billion USD. This figure amounts to 64 % of the total amount of the projects undertaken in 45 years (344.7 billion USD).
Over the past decade, the average project cost showed a remarkable increase. Within this framework, the average project cost was recorded 37.1 million USD in 2008, whereas, this figure reached 79.3 million USD in July of 2017.
The Russian Federation comes on the top among the countries where Turkish contractors undertook projects with a total amount of 67.6 billion USD (19.6 %). Turkmenistan (46.8 billion USD - 13.6 %) and Libya in 2017 (28.9 billion USD - 8.4 % share) follow the RF.
On a sectoral basis, Turkish contractors have realized especially projects of highways, tunnels and bridges. The housing projects have been ranked as second (43,7 billion USD) and the trade center projects (29,1 billion USD) as third.
In 2017, 45 Turkish companies are listed among the world’s greatest 250 construction companies.
Among these firms 7 seven of them gained a seat in the list of first 100 companies. For the first time, 2 Turkish firms were considered among the first 50 companies with a revenue of 3 billion USD.
Tourism
Türkiye is the 6th most popular tourist destination in the world (2015), attracting more than 30 million tourists annually and continuing to show positive growth year-on-year. The tourism sector has set a target of 50 million tourist arrivals and of USD 50 billion tourism revenues by 2023.
30.9 million tourists visited Türkiye in 2016 and provided approximately 18.7 billion USD input to the economy.
In tourism sector there has been an increase of 29 % in the number of the foreign tourists in 2017. For the period between January and September 2017 26 million tourists visited our country. In the same period, tourism revenue worth of 15.5 billion USD was generated.
For the period between January and September 2017, the greatest number of tourists came from the Russian Federation (15.82 % – 4,122,305 people), Federal Republic of Germany (11.22 % - 2,923,1527 people) and Iran (7,28 % - 1.895,907 people).
Turkish tourism sector is targeting to be among the top 5 countries in the world in terms of attracting the highest number of tourists and receiving the highest amount of tourism revenue by 2023.
Antalya is the most preferred city in Türkiye based on the number of incoming foreign visitors. Antalya, receiving 34 % of tourists coming to Türkiye, has over 500 4-star and 5-star hotels in its center and surrounding towns such as Kemer, Belek and Kas.
Türkiye has 7,200 km of coastline and ranks 2nd among 38 countries with its 436 blue-flag beaches. Only Spain has more blue-flag beaches than Türkiye with 578. There are also 22 blue-flag marinas in Türkiye.
Owing to its increasing global connectivity, due in no small part to its favorable geographical position, Istanbul is very much the center of attention with its recent rise to the rank of 3rd most visited city in Europe according to MasterCard Global Destinations Cities Index 2016 with over 12 million foreign and domestic visitors per year.
Monetary Policy
In line with its steady economic growth, Türkiye has achieved significant progress in public finance. EU defined general debt stock regressed from 72.1 % to 28,3 % between 2002 and 2016. Türkiye has been conforming to the criterion of “maximum 60 % public debt stock” which is among the EU-Maastricht criteria, since 2004. Likewise, the ratio of budgetary deficit to Gross Domestic Product (GDP) regressed from 10 % to under 2 % between 2003-2016. Türkiye has thus started conforming to the EU-Maastrict criterion for budgetary balance.
In 2016, Consumer Price Index (CPI) realized at 8,53 %.
Reserves
The Central Bank international reserves reached 113.582 billion USD as of 15 December 2017.