Economy of Turkey



Turkey is a founding member of the OECD and G20. The country's economy ranked as the 18th-largest in the world and 8th-largest in Europe by nominal GDP in 2023. It also ranked as the 11th-largest in the world and 5th-largest in Europe by PPP in 2023. According to the IMF, as of 2022, Turkey had an upper-middle income, mixed-market, emerging economy. Turkey has often been defined as a newly industrialized country since the turn of the 21st century. The country is the fifth most visited destination in the world, and has over 1,500 R&D centres established both by multinational and national firms. Turkey is among the world's leading producers of agricultural products, textiles, motor vehicles, transportation equipment, construction materials, consumer electronics, and home appliances. Among OECD nations, Turkey has a highly efficient and strong social security system; social expenditure stood at roughly 12.5% of GDP.

Over the past 20 years, there have been major developments in the financial and social aspects of Turkey's economy, such as increases in employment and average income since 2000. A period of strong economic growth between 2002 and 2013 (except for 2009) was followed by a slowdown in growth in terms of USD-based nominal GDP figures between 2014 and 2020, especially during the 2018 Turkish currency and debt crisis, although the growth sustained in these years as well in terms of nominal GDP. Furthermore, there has been a steady recovery and a faster pace in growth in Turkey's GDP figures since 2021, which have reached their all-time highest values by the end of 2023. Growth-focused financial policies, such as the preference to keep interest rates as low as possible (dubbed Erdoganomics ) have led to high inflation in recent years.

Data
The following table shows the main economic indicators from 1980 to 2023 (with IMF staff estimates in 2024–2028). Inflation below 10% is in green.

Main economic sectors
As of November 2023, there are 1,086,670 registered companies based in Turkey. The sector with the highest number of companies registered in the country is Manufacturing with 241,362 companies. This is followed by Wholesale Trade and Services with 197,476 and 187,325 companies respectively.

Consumer electronics and home appliances
Turkey's Vestel is the largest TV producer in Europe, accounting for a quarter of all TV sets manufactured and sold on the continent in 2006. By January 2005, Vestel and its rival Turkish electronics and white goods brand Beko accounted for more than half of all TV sets manufactured in Europe. Another Turkish electronics brand, Profilo Telra, was Europe's third-largest TV producer in 2005.

Textiles and clothing
The Turkish textile is the world's fifth largest exporter, accounting for 10% of the country's GDP and employing 750 000 people in 2018. Turkish companies made clothing exports worth $13.98 billion in 2006; more than $10.67 billion of which (76.33%) were exported to the European Union.

Motor vehicles and automotive products
The automotive industry in Turkey, which plays an important role in the manufacturing sector of the Turkish economy, produced 1,352,648 motor vehicles in 2022, ranking as the 13th largest producer in the world (production peaked at 1,695,731 motor vehicles in 2017, when Turkey also ranked 13th). Turkish automotive companies like TEMSA, Otokar and BMC are among the world's largest van, bus and truck manufacturers. Togg, or Turkey's Automobile Joint Venture Group Inc. is the first all-electric vehicle company of Turkey.

The automotive industry is an important part of the economy since the late 1960s. The companies that operate in the sector are mainly located in the Marmara Region. With a cluster of car-makers and parts suppliers, the Turkish automotive sector has become an integral part of the global network of production bases, exporting over $22.94 billion worth of motor vehicles and components in 2008.

Global car manufacturers with production plants include Fiat/Tofaş, Oyak-Renault, Hyundai, Toyota, Honda and Ford/Otosan. Turkish automotive companies like TEMSA, Otokar and BMC are among the world's largest van, bus and truck manufacturers. Togg is a new Turkish automotive company established in 2018 for producing EVs. Togg's factory in Gemlik, Bursa Province, was inaugurated on 29 October 2022, the 99th anniversary of the Turkish Republic.

Turkey's annual auto exports, including trucks and buses, surpassed 1 million units for the first time in 2016 as foreign automakers' investment in new models and a recovery in its mainstay European market lifted shipments. According to the industry group Automotive Manufacturers Association (OSD), Turkey-based car plants exported 1.14 million units in 2016, up 15% from the year before. Auto exports hit a record high for the fourth straight year. Production grew 9% year on year in 2016 to 1.48 million units, setting a new record for the second consecutive year. Nearly 80% of vehicles produced in Turkey were exported.

Multiple unit trains, locomotives and wagons
TÜLOMSAŞ (1894), TÜVASAŞ (1951) and EUROTEM (2006) are among the major producers of multiple unit trains, locomotives and wagons in Turkey, including high-speed EMU and DMU models.

Bozankaya is a Turkish manufacturer of rolling stock including metro, tram and trolleybus vehicles in Ankara.

Defence industry
Turkey has many modern armament manufacturers. Annual exports reached $1.6 billion in 2014. MKEK, TAI, Aselsan, Roketsan, FNSS, Nurol Makina, Otokar, and Havelsan are major manufacturers. On 11 July 2002, Turkey became a Level 3 partner of the F-35 Joint Strike Fighter (JSF) development program. TAI builds various aircraft types and models, such as the F-16 Fighting Falcon for the Turkish Air Force. Turkey has recently launched domestically built new military/intelligence satellites including a 0.8m resolution reconnaissance satellite (Project Göktürk-1) for use by the Turkish Armed Forces and a 2m resolution reconnaissance satellite (Project Göktürk-2) for use by the Turkish National Intelligence Organization.

Other important products include the TAI TF Kaan, TF2000-class destroyer, Milgem class corvette, Baykar MIUS Kızılelma UCAV, Baykar Akıncı HALE UCAV, Baykar Bayraktar TB2 MALE UCAV, TAI Aksungur MALE UCAV, TAI Anka MALE UAV/UCAV, Aselsan İzci UGV, Altay main battle tank, T-155 Fırtına self-propelled howitzer, J-600T missile, T-129 attack helicopter, A400M, Roketsan UMTAS anti-tank missile, Roketsan Cirit laser-guided rocket, Panter howitzer, ACV-300, Otokar Cobra and Akrep, BMC Kirpi, FNSS Pars 6x6 and 8x8 APC, Nurol Ejder 6x6 APC, TOROS artillery rocket system, Bayraktar Mini UAV, ASELPOD, and SOM cruise missile.

Steel-Iron industry
Turkey ranks 8th in the list of countries by steel production. In 2013, total steel production was 35.134 million tonnes. Turkey's crude steel production reached a record high of 34.1 million tons in 2011. Notable producers (above 2 million tonnes) and their ranks among top steel producing companies.
 * Erdemir (7.1 million tonnes) (47th) ( Only Erdemir-Turkey; Erdemir-Romania is not included )
 * Habaş (4.4 million tonnes) (72nd)
 * İçdaş (3.6 million tonnes) (76th)
 * Diler (2.3 million tonnes) (108th)
 * Çolakoğlu (2.1 million tonnes) (110th)

Science and technology
Turkey boasts over 80 technoparks where around 6,000 national and multinational companies engage in R&D activities. TÜBİTAK is the leading agency for developing science, technology and innovation policies in Turkey. The Turkish Academy of Sciences is an autonomous scholarly society acting to promote scientific activities in Turkey. TAEK is the official nuclear energy institution of Turkey. Its objectives include academic research in nuclear energy, and the development and implementation of peaceful nuclear tools.

Turkish government companies for research and development in military technologies include Turkish Aerospace Industries, ASELSAN, HAVELSAN, ROKETSAN, MKE, among others. Turkish Satellite Assembly, Integration and Test Center is a spacecraft production and testing facility owned by the Ministry of National Defence and operated by the Turkish Aerospace Industries. The Turkish Space Launch System is a project to develop the satellite launch capability of Turkey. It consists of the construction of a spaceport, the development of satellite launch vehicles as well as the establishment of remote earth stations.

Construction and contracting sector
The Turkish construction and contracting industry is made up of a large number of businesses. In 2016 a total of 39 Turkish construction and contracting companies were listed in the Top 250 International Contractors List prepared by the Engineering News-Record. From the beginning of the 1970s to the end of 2022, Turkish contractors have completed more than 11,605 projects in 133 countries. Their business volume abroad has reached 472 billion US Dollars in 2022.

As Turkey is prone to strong earthquakes, the buildings that were constructed before the post-1999 safety standards and regulations remain a major concern, with many ongoing urban redevelopment and reconstruction projects, especially in large cities. In 2019, an amnesty plan to register illegally constructed buildings for generating extra tax revenues to the government brought in $3.1 billion, but the plan was criticized for ignoring safety issues. The two major earthquakes on February 6, 2023 in southern Turkey have revealed that some of the recently-built structures that collapsed weren't constructed in accordance with the latest safety regulations.

Banking and finance


In 2020, the total value of assets of the banking sector in Turkey amounted to more than $800 billion. As of January 2021, there were a total of 48 banks operating with 9,880 branches in Turkey and 71 branches abroad. , the foreign currency deposits of the citizens and residents in Turkish banks stood at $234 billion, equivalent to around half of all deposits. , the foreign currency reserves of the Turkish Central Bank were $62.6 billion (a 2.3% increase compared to the previous month), its gold reserves were $52.2 billion (a 7.2% increase compared to the previous month), while its official reserve assets stood at $122.4 billion (a 4.3% increase compared to the previous month).

The Central Bank of the Republic of Turkey (Türkiye Cumhuriyet Merkez Bankası) was founded in 1930, as a privileged joint-stock company. The CBRT possesses the sole right to issue notes. It also has the obligation to provide for the monetary requirements of the state agricultural and commercial enterprises.

Originally established as the Ottoman Stock Exchange (Dersaadet Tahvilat Borsası) in 1866, and reorganized to its current structure at the beginning of 1986, the Istanbul Stock Exchange (ISE) is the sole securities market of Turkey. During the 19th and early 20th centuries, Bankalar Caddesi (Banks Street) in Istanbul was the financial center of the Ottoman Empire, where the headquarters of the Ottoman Central Bank (established as the Bank-ı Osmanî in 1856, and later reorganized as the Bank-ı Osmanî-i Şahane in 1863) and the Ottoman Stock Exchange (1866) were located. Bankalar Caddesi continued to be Istanbul's main financial district until the 1990s, when most Turkish banks began moving their headquarters to the modern central business districts of Levent and Maslak. In 1995, the Istanbul Stock Exchange moved to its current building in the Istinye quarter. The Istanbul Gold Exchange was also established in 1995. The stock market capitalisation of listed companies in Turkey was valued at $161,537,000,000 in 2005 by the World Bank.



Government regulations passed in 1929 required all insurance companies to reinsure 30% of each policy with the Millî Reasürans T.A.Ş. (National Reinsurance Corporation) which was founded on 26 February 1929. In 1954, life insurance was exempted from this requirement. The insurance market is officially regulated through the Ministry of Commerce.

Until 1991, establishing a private sector bank in Turkey was subject to strict government controls and regulations. On 10 October 1991 (ten days before the general elections of 20 October 1991) the ANAP government of Prime Minister Mesut Yılmaz gave special permissions to five prominent businessmen (who had close links to the government) to establish their own small-scale private banks. These were Kentbank (owned by the Süzer Group), Park Yatırım Bankası (owned by Karamehmet), Toprakbank (owned by Toprak), Bank Ekspres (owned by Betil), and Alternatif Bank (owned by Doğan.) They were followed by other small-scale private banks established between 1994 and 1995, during the DYP government of Prime Minister Tansu Çiller, who introduced drastic changes to the banking laws and regulations which made it easier to establish a bank in Turkey, but also opened many loopholes in the system. In 1998 there were 72 banks in Turkey, many of which were owned by businessmen who used them for financing the investments of their own companies in diverse sectors, such as contracting, textiles and media.

As a result, in 1999 and 2001, the DSP government of Prime Minister Bülent Ecevit had to face two major economic crises that were caused mostly by the weak and loosely regulated banking sector, the growing trade deficit, and the devastating İzmit earthquake of 17 August 1999. The Turkish lira, which was pegged to the U.S. dollar prior to the crisis of 2001, had to be floated, and lost an important amount of its value. This financial breakdown reduced the number of banks to 31. Prime Minister Bülent Ecevit had to call the renowned economist Kemal Derviş to tidy up the economy and especially the weak banking system so that a similar economic crisis would not happen again.



More than 34% of the assets in the Turkish banking sector are concentrated in the Agricultural Bank (Ziraat Bankası), Housing Bank (Yapı Kredi Bankası), Isbank (Türkiye İş Bankası) and Akbank. The five big state-owned banks were restructured in 2001. Political involvement was minimized and loaning policies were changed. There are also numerous international banks, which have branches in Turkey. A number of Arabian trading banks, whith Islamic banking practices, are also present in the country.

After years of low levels of foreign direct investment (FDI), in 2007 Turkey succeeded in attracting $21.9 billion in FDI and is expected to attract a higher figure in following years. A series of large privatizations, the stability fostered by the start of Turkey's EU accession negotiations, strong and stable growth, and structural changes in the banking, retail, and telecommunications sectors have all contributed to the rise in foreign investment.

At present, the Turkish banking sector is among the strongest and most expansive in East Europe, the Middle East and Central Asia. Between 2001 and 2008, the Turkish lira maintained its stability, becoming an internationally exchangeable currency again, in line with the inflation that had dropped to single-digit figures during this period. The "New Turkish lira" (TRY) was introduced on 1 January 2005. For a few days in March 2006, 1 New Turkish lira was slightly more valuable than 1 Swiss franc (1 CHF = 0.994 TRY on March 1, 2006), maintaining a close balance with the value of the Swiss franc until the end of December 2007. On 1 January 2009, the New Turkish lira was renamed once again as the "Turkish lira", with the introduction of new banknotes and coins. Fiscal deficit benefitted (though in a small amount) from large industrial privatizations. Banking came under stress beginning in October 2008, as a result of the 2008 global financial crisis. Turkish banking authorities warned state-run banks against the pullback of loans from the larger financial sectors. Turkey's economy resumed its growth between 2009 and 2013, which was followed by a period of stagnation and recession between 2014 and 2020. Turkey's GDP began to recover and grow again in the period between 2020 and 2023.

Transport




In 2013 there were ninety-eight airports in Turkey, including 22 international airports. , Istanbul Atatürk Airport is the 11th busiest airport in the world, serving 31,833,324 passengers between January and July 2014, according to Airports Council International. The new (third) international airport of Istanbul is planned to be the largest airport in the world, with a capacity to serve 150 million passengers per annum.

The state-owned utility Turkish State Railways operates the 12,740–km railway network, 23rd longest in the world. Since 2003, Turkish State Railways has also been investing in high-speed rail lines, which at 2,175 km (1,353 mi) ranked ninth longest in the world.

As of 2010, the country had a roadway network of 426,951 km, including 2,080 km of expressways and 16,784 km of divided highways.

As of 2010, the Turkish merchant marine included 1,199 ships (604 registered at home), ranking 7th in the world. Turkey's coastline has 1,200 km of navigable waterways.

In 2008, 7555 km of natural gas pipelines and 3636 km of petroleum pipelines spanned the country's territory.

Communications
As of 2008, there were 17,502,000 operational landline telephones in Turkey, which ranked 18th in the world; while there were 65,824,000 registered mobile phones in the country, which ranked 15th in the world during the same year. The largest landline telephone operator is Türk Telekom, which also owns TTNET, the largest internet service provider in Turkey. The largest mobile phone operators in the country are Turkcell, Vodafone Turkey, Avea and TTNET Mobil.

The telecommunications liberalisation process started in 2004 after the creation of the Telecommunication Authority, and is still ongoing. Private sector companies operate in mobile telephony, long-distance telephony and Internet access. Additional digital exchanges are permitting a rapid increase in subscribers; the construction of a network of technologically advanced intercity trunk lines, using both fiber-optic cable and digital microwave radio relay, is facilitating communication between urban centres.

The remote areas of the country are reached by a domestic satellite system, while the number of subscribers to mobile-cellular telephone service is growing rapidly.

The main line international telephone service is provided by the SEA-ME-WE 3 submarine communications cable and by submarine fiber-optic cables in the Mediterranean Sea and Black Sea that link Turkey with Italy, Greece, Israel, Bulgaria, Romania, and Russia. In 2002, there were 12 Intelsat satellite earth stations; and 328 mobile satellite terminals in the Inmarsat and Eutelsat systems.

Türksat A.Ş. is the primary communications satellite operator of Turkey, controlling the Turksat series of satellites. Göktürk-1, Göktürk-2 and Göktürk-3 are Turkey's earth observation satellites for reconnaissance, operated by the Turkish Ministry of National Defense. BILSAT-1 and RASAT are the scientific observation satellites operated by the TÜBİTAK Space Technologies Research Institute, which (together with Turkish Aerospace Industries and Aselsan) also takes part in the production of Turkey's satellites.

As of 2001, there were 16 AM, 107 FM, and 6 shortwave radio stations in the country.

As of 2015, there were 42,275,017 internet users in Turkey, which ranked 15th in the world; while as of 2012, there were 7,093,000 internet hosts in the country, which ranked 16th in the world.

Tourism
In 2019, Turkey ranked sixth in the world in terms of the number of international tourist arrivals, with 51.2 million foreign tourists visiting the country. Over the years, Turkey has emerged as a popular tourist destination for many Europeans, competing with other Mediterranean locations such as Greece, Italy and Spain. Resorts in provinces such as Antalya and Muğla (which are located on the Turkish Riviera) have become very popular among tourists.

Medical tourism
There are numerous private hospitals in Turkey, which has benefited from medical tourism in recent years. Health tourism generated revenues worth $1 billion in 2019 for Turkey's economy. A total of 662,087 patients were treated at Turkish hospitals in 2019 within the scope of health tourism, with around 60% of the income being obtained from plastic surgeries.

Largest companies
In 2024, ten publicly traded Turkish companies were listed in the Forbes Global 2000 list – an annual ranking of the top 2000 public companies in the world by Forbes magazine. The banking industry leads with four companies in the list followed by the airline, automotive and retailer with one company each. There are also three conglomerates. As of 2024, the listed public companies were:

Long term GDP forecasts
The following table is an OECD Long Term Projections made in February 2022 for largest 16 economies by GDP using PPP exchange rates from 2030 to 2060.

External trade and investment
As of 2016, the main trading partners of Turkey are the European Union, Russia, the United Kingdom, the UAE, Iraq, and China, many being top in both export as well as import. Turkey has taken advantage of a customs union with the EU, signed in 1995, to increase industrial production for exports, while benefiting from EU-origin foreign investment into the country. In addition to the European-Turkish Customs Union, the Turkish government has signed free-trade agreements with 22 countries.

A very large aspect of Turkey trade revolves around the automotive industry, where its top exports are cars, accounting for $13.2 billion. Other top exports from the country are gold, delivery trucks, vehicle parts and jewelry, which are respectively, $6.96 billion, $5.04 billion, $4.64 billion, and $3.39 billion. These values are calculated using the 1992 revision of the Harmonized System classification. Comparatively, it imports many of the same industries, such as, gold valued at $17.1 billion, refined petroleum at $9.8 billion, cars at $8.78 billion, vehicle parts at $6.34 billion and scrap iron at $5.84 billion.

Turkey is also a source of foreign direct investment in central and eastern Europe and the CIS, with more than $1.5 billion invested. 32% has been invested in Russia, primarily in the natural resources and construction sector, and 46% in Turkey's Black Sea neighbours, Bulgaria and Romania. Turkish companies also have sizable FDI stocks in Poland, at about $100 million.

The construction and contracting companies, such as Enka, Rönesans Holding and Tekfen, have been significant players in the country's economy.

Without a carbon price exporters to the European Union will have to pay the CBAM from 2026.

Turkey had many improvements in the ease of doing business index. Its rank increased from 68th in 2017 to 33th in 2020. As of 2021, it was performing better than countries like the Netherlands and Belgium.

Minerals


Turkey is the tenth-ranked producer of minerals in the world in terms of diversity. Around 60 different minerals are currently produced in Turkey. The richest mineral deposits in the country are boron salts, Turkey's reserves amount to 72% of the world's total. According to the CIA World Factbook, other natural resources include iron ore, copper, chromium, uranium, antimony, mercury, gold, silver, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur) and clay.

In 2019, the country was the 2nd largest world producer of chromium; the world's largest producer of boron; 6th largest world producer of antimony; 9th largest world producer of lead; 13th largest world producer of iron ore; 11th largest world producer of molybdenum; 4th largest world producer of gypsum; 15th largest world producer of graphite; in addition to being the 11th largest world producer of salt.

As a gold producer Turkey is currently ranked 22nd globally. Hosting some of the largest gold deposits in the European continent it is currently Europe's largest gold producer, producing 42 tonnes of gold in 2020. World class deposits include Kisladag Mine 17Moz and Copler 10Moz. The country hosts 18 mid sized deposits from 1-10Moz gold, these include the Kiziltepe Gold Mine, Salinbas, Hod Maden, Ovacik and Efemcukuru.

Environment
Almost all post-covid stimulus was detrimental to the environment, with Russia being the only worse country. In the 21st century, Turkey's fossil fuel subsidies are around 0.2% of GDP, including at least US$14 billion (US$169 per person) between January 2020 and September 2021. Data on finance for fossil fuels by state-owned banks and export credit agencies is not public. As of 2023 fossil gas is subsidized more than electricity - equalizing the subsidies would benefit the environment.

Employment
In 2021 trade unions complained that TurkStat data showed unemployment falling whereas that of the government employment agency showed it rising. Environmentalists argue that some actions to improve the environment would also benefit the economy, for example: that investing in wind power in Turkey and solar power in Turkey would create jobs and is competitive with fossil fuels.

Poverty
Turkey made steady progress in reducing poverty from the early 2000s to the mid-2010s.

Regional disparities
According to Eurostat data, Turkish GDP per capita adjusted by purchasing power standards stood at 64 percent of the EU average in 2018. Istanbul has both the largest GDP and GDP per capita in Turkey.

The country's wealth is mainly concentrated in the northwest and west, while the east and southeast suffer from poverty, lower economic production and higher levels of unemployment. However, in line with the rapid growth of Turkey's GDP during the first two decades of the 21st century (with brief periods of stagnation and recession), parts of Anatolia began reaching a higher economic standard. These cities are known as the Anatolian Tigers.

Richest and poorest NUTS-2 regions (GDP PPP 2017)
Source: Eurostat – ESA 95

Richest and poorest NUTS-1 regions (GDP PPP 2017)
Source: Eurostat – ESA 95