Turkey

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Turkey, a country of 74 million inhabitants, has an economy in transition, a relatively high degree of dependence on agriculture and heavy industry (10.2% and 29.7% of GDP respectively) and a tertiary sector in full expansion (60.1% of GDP). After going through a serious economic and political crisis in 2001, Turkey has made a spectacular recovery thanks to a more favorable political climate and also thanks to monetary, fiscal and structural reforms inspired by the World Bank and the IMF. The GDP growth rate was 6% in 2006 and 5% in 2007. The weakening of the Turkish Lira in May-June 2006, accompanied by higher inflation (about 8.5%) and a marked tightening of monetary policy, led to a slowing down in 2006. According to the IMF, after 2 years of "economic slowing down" compared with 2005 (7% growth), the growth of GDP should take off again in 2008. The weakness of the Turkish Lira and domestic demand will, however, help to reduce slightly the current account deficit in 2007-8. Unemployment for its part is stable around 10% (9.7% in 2007).

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	302.56	362.46	401.76	482.02e	513.30e
GDP (constant prices, annual % change)	8.9	7.4	6.1	5.0e	5.3e
GDP per capita (USD)	4,288.53	5,061.99	5,533.68	6,547.70e	6,876.73e
Inflation rate (%)	8.6	8.2	9.6	8.2e	4.6e
Unemployment rate (% of the labor force)	10.3	10.3	n.c.	n.c.	n.c.
Current Account (billions USD)	-15.60	-22.60	-31.90	-35.93e	-35.89e
Current Account (in % of GDP)	-5.2	-6.2	-7.9	-7.5e	-7.0e

Source: IMF - World Economic Outlook Database; World Bank - World Development Indicators

Note: (e) Estimated data

Socio-demographic indicators	2003	2004	2005
Unemployment rate (%)	10.5	10.3	10.3

Source:

Main sectors of industry

Agriculture in Turkey, which contributes 10.2% to GDP and employs 26% of the population, still suffers from low productivity because farms are small. Wheat is the main crop. The country is the third largest exporter of tobacco in the world, the leading producer of hazelnuts (70% of world production). Mineral resources are numerous but under-exploited. The manufacturing industry makes up nearly 30% of GDP, the textile and automobile sectors being the main activities. The Turkish government gives special priority to large infrastructure projects, in particular in the transport sector - most functioning under the BOT model (build, operate, transfer). Tourism represents 4% of GDP with about 13 million tourists a year. The tertiary sector (tourism included) contributes about 60% to GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	8.6	3.2	7.2
Value added (in % of GDP)	12.9	22.4	64.7
Employment by sector (in % of total employment)	29.5	24.7	45.8

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	1,507,226.00	1,500,885.00	1,425,537.00	1,343,583.00	1,428,453.00

Source: World Bank - World Development Indicators

Foreign trade in figures

Turkey's foreign trade reached the record figure of 277 billion USD in 2007 (+23% in comparison with 2006 which was already a record year) i.e. nearly 70% of GDP. The spearheads of Turkish foreign trade are the automobile and textile industries. Then come, in order, the sectors of agri-food (raw and processed products), machines and equipment and electronic equipment. The European Union is by far Turkey's leading customer (56.4% of Turkish exports). Yet the country registers a high level of trade deficit because of its high energy dependence on Russia and its Middle East neighbors. In addition, like the household appliance sector, which paradoxically is a high export industry, many components (about 80%) are imported to be assembled in Turkey. Finally, the Turks are particularly keen on cheap imported goods. In spite of the government's efforts to favor innovation (with the development of poles of competitiveness and setting up tax credits in favor of Research and Development), Turkish exports have a relatively low added value. Turkish companies are still not very present on markets with high development potential (China or Eastern Europe) and suffer from comparison with their German neighbors.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	47,407	65,216	90,925	109,875	n.c.
Exports of goods (millions USD)	40,124	51,206	67,047	76,949	n.c.
Imports of services (millions USD)	6,161	7,502	10,163	11,891	n.c.
Exports of services (millions USD)	14,040	18,006	22,947	25,857	n.c.
Imports of goods and services (annual % change)	15.8	27.1	24.7	11.6	5.5
Exports of goods and services (annual % change)	11.1	16.0	12.5	8.6	14.3
Imports of goods and services (in % of GDP)	30.7	30.7	34.7	34.0	34.1
Exports of goods and services (in % of GDP)	29.2	27.4	28.9	27.4	28.0
Trade Balance (millions USD)	-7,283	-14,010	-23,878	-32,926	n.c.
Trade Balance (including service) (millions USD)	596	-3,506	-11,094	-18,960	n.c.
Current Account (millions USD)	-1,524	-8,036	-15,604	-23,155	n.c.
Current Account (in % of GDP)	-0.8	-3.3	-5.2	-6.4	n.c.
Foreign trade (in % of GDP)	59.9	58.0	63.6	61.4	62.0

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Germany	11.3%
United Kingdom	8.0%
Italy	7.9%
United States	5.9%
France	5.4%

Main suppliers (% of imports)	2006
Russia	12.7%
Germany	10.6%
China	6.9%
Italy	6.2%
France	5.2%

Source: 2006

Main products

Main exports (% of exports)	2006
Articles of apparel and clothing accessories, knitted	7.8%
Articles of apparel and clothing accessories	5.0%
Iron and steel	4.5%
Electrical machinery and equipment	3.2%

Main imports (% of imports)	2006
Machinery and mechanical appliances	9.0%
Iron and steel	6.1%
Mineral fuels, mineral oils	4.9%
Plastics	4.2%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: State Planning Organization Ministry of Agriculture and Rural Affairs Ministry of Industry and Trade Turkish Ministry of Finances
Statistical Office: Turkish Statistical Institute
Central Bank: Central Bank of The Republic of Turkey
Stock Exchange: Istanbul Stock Exchange
Online newspapers: Turkish Daily News
Turkish Press News
Today's Zaman
Hurriyet
Sabah
Milliyet
Search Engines: Netbul
Turk Evi
Turk Net
Turkey Web
Economic portals: Ministry of Foreign Trade
Capital Markets Board of Turkey

Political outline

Executive Power: The President of the Republic is the Head of State. He is elected by indirect universal suffrage for a single 7 year term of office, by secret ballot in Parliament. However, following a constitutional change in 2007, the next election (2014) will be by direct universal suffrage. He has the function of an arbitrator (promulgation of laws, signature of decrees..) and he appoints the Prime Minister and the Council of Ministers. The President also appoints the judicial organs and other governmental organs. His role is above all ceremonial but his position benefits from considerable symbolic importance.
The Prime Minister is the head of the government. He is elected by Parliament when there is a vote of confidence in the government, for a five year term of office. He holds the executive power, which includes law enforcement and managing the current business of the country. The government he directs is responsible before Parliament which can overturn it with an absolute majority of its members.
Legislative Power: Legislative power in Turkey is unicameral. The Parliament, called Great National Assembly of Turkey, has 550 seats, and its members are elected by universal suffrage for five years according to a system of proportional representation.
Main political parties: - The AKP (Justice and Development Party) - a conservative party, moderately Islamic
- The CHP (Republican People's Party) - a nationalist, social-democratic party
- The MHP (Nationalist Movement Party) - extreme right nationalist party
- The DEHAP (Democratic People's Party) and Independents - left wing party, pro-Kurd
- The ANAP (Motherland Party) - center right and liberal party
- The DYP ( Just Way Party) - non-religious, right wing conservative party.
Current political leaders: President : Abdullah GÜL (since August 2007) - AKP and former Minister of Foreign Affairs (March 2003 to July 2007 )
Prime Minister: Recep Tayyip ERDOGAN (since March 2003) - AKP
Minister of Foreign Affairs: Ali BABACAN
Minister of Foreign Trade: Kürsad TÜZMEN
Minister of Finance: Kemal UNAKITAN
Minister of the Interior: Besir ATALAY
Next election dates: Presidential : August 2014
Legislative : July 2012