Turkey Economy Profile 2008

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 more than 35% of employment. It has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport, and communication. 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 is turning around with the implementation of economic reforms, and 2004 GDP growth reached 9%, followed by roughly 5% annual growth from 2005-07. Inflation fell to 7.7% in 2005 - a 30-year low but climbed back to 8.5% in 2007. 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, 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. Economic fundamentals are sound, marked by strong economic growth and foreign direct investment. Turkey's high current account deficit leaves the economy vulnerable to destabilizing shifts in investor confidence, however.

GDP (purchasing power parity)

$667.7 billion (2007 est.)

GDP (official exchange rate)

$482 billion (2007 est.)

GDP - real growth rate

5.1% (2007 est.)

GDP - per capita (PPP)

$9,400 (2007 est.)

GDP - composition by sector

agriculture: 8.9%
industry: 30.8%
services: 59.3% (2007 est.)

Population below poverty line

20% (2002)

Household income or consumption by percentage share

lowest 10%: 2%
highest 10%: 34.1% (2003)

Inflation rate (consumer prices)

8.5% (2007 est.)

Investment (gross fixed)

21% of GDP (2007 est.)

Labor force

25.27 million
note: about 1.2 million Turks work abroad (2007 est.)

Labor force - by occupation

agriculture: 35.9%
industry: 22.8%
services: 41.2% (3rd quarter, 2004)

Unemployment rate

9.7% plus underemployment of 4% (2007 est.)

Distribution of family income - Gini index

43.6 (2003)

Budget

revenues: $137.8 billion
expenditures: $151.9 billion (2007 est.)

Public debt

58.2% of GDP (2007 est.)

Industries

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

Industrial production growth rate

4.5% (2007 est.)

Electricity - production

154.2 billion kWh (2005)

Electricity - consumption

129 billion kWh (2005)

Electricity - exports

1.798 billion kWh (2005)

Electricity - imports

636 million kWh (2005)

Oil - production

45,460 bbl/day (2005 est.)

Oil - consumption

660,800 bbl/day (2005 est.)

Oil - imports

724,400 bbl/day (2004)

Oil - exports

112,600 bbl/day (2004)

Oil - proved reserves

300 million bbl (1 January 2006 est.)

Natural gas - production

860.3 million cu m (2005 est.)

Natural gas - consumption

26.25 billion cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

25.48 billion cu m (2005)

Natural gas - proved reserves

8.147 billion cu m (1 January 2006 est.)

Current Account Balance

-$36.27 billion (2007 est.)

Agriculture - products

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

Exports

$110.5 billion f.o.b. (2007 est.)

Exports - commodities

apparel, foodstuffs, textiles, metal manufactures, transport equipment

Exports - partners

Germany 11.3%, UK 8%, Italy 7.9%, US 6%, France 5.4%, Spain 4.4% (2006)

Imports

$156.9 billion f.o.b. (2007 est.)

Imports - commodities

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

Imports - partners

Russia 12.8%, Germany 10.6%, China 6.9%, Italy 6.2%, France 5.2%, US 4.5%, Iran 4% (2006)

Reserves of foreign exchange and gold

$74.39 billion (31 December 2007 est.)

Debt - external

$226.4 billion (30 June 2007)

Stock of direct foreign investment - at home

$84.53 billion (2006 est.)

Stock of direct foreign investment - abroad

$9.249 billion (2006 est.)

Market value of publicly traded shares

$162.4 billion (2006)

Economic aid - recipient

ODA, $464 million (2005)

Currency (code)

Turkish lira (TRY); old Turkish lira (TRL) before 1 January 2005

Exchange rates

Turkish liras per US dollar - 1.319 (2007), 1.4286 (2006), 1.3436 (2005), 1.4255 (2004), 1.5009 (2003)
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

Fiscal year

calendar year