International Investing: Turkey

Economic Overview: Turkey has a volatile economy whose growth rate has exceeded 6 percent in many years (and reached 9 percent in 2004), but suffered sharp reversals in 1994, 1999, and 2001.

The government plays major roles in basic industry, banking, transportation, and communications, but privatization sales are currently approaching $21 billion. Agriculture still accounts for more than 35 percent of employment; the largest industrial sectors are textiles and clothing, but competition has grown sharply with the end of the global quota system.

The economy is burdened with a high current account deficit and substantial debt. The opening of a new oil pipeline and the promise of EU membership are expected to improve a relatively low level of foreign direct investment.

What to Watch: With a population of 72 million, Turkey is Europe's second largest market, the world's 17th largest economy and Europe’s seventh.

The country is a prominent actor in international trade and a hub for foreign direct investments.

Having joined the European Union, improved macroeconomic fundamentals and strengthened GDP growth by 7 percent on average over the last four years, Turkey continues its rapid integration into the global economy.

While Turkish contractors have undertaken $75.2 billion in projects abroad, the country attracted $20 billion in 2006, doubling that in 2005.

The country has been destined to be a bridge linking Central Asian oil and gas to energy-starved Europe. As a base of stability in an unstable region and a key ally of the Western world, Turkey is a land of opportunities.


Population 67.4 million 72.9 million
GNI Atlas method (current US$) 201.2 billion 393.9 billion
GNI per capita Atlas method (current US$) 2 980.0 5 400.0
GDP (current US$) 199.3 billion 402.7 billion
GDP growth (annual %) 7.4 6.1
Inflation GDP deflator (annual%) 49.9 11.5
Agriculture value added (% of GDP) 15.4 12.9
Industry value added (% of GDP) 25.3 22.4
Services etc. value added (% of GDP) 59.4 64.7
Exports of goods and services (% of GDP) 24.0 28.0
Imports of goods and services (% of GDP) 31.5 34.1
Gross capital formation (% of GDP) 24.5 27.0
Revenue excluding grants (% of GDP) 27.8 N/A
Cash surplus/deficit (% of GDP) -7.9 N/A
States and Markets
Time required to start a business (days) N/A 9.0
Market capitalization of listed companies (% of GDP) 35.0 40.3
Military expenditure (% of GDP) 5.0 N/A
Fixed line and mobile phone subscribers (per 1 000 people) 512.1 N/A
Internet users (per 1 000 people) 37.1 N/A
Roads paved (% of total roads) 35.3 N/A
High-technology exports (% of manufactured exports) 4.8 N/A
Global Links
Merchandise trade (% of GDP) 41.3 55.2
Net barter terms of trade (2000 = 100) 100.0 96.2
Foreign direct investment net inflows (BoP current US$) 982.0 million N/A
Long-term debt (DOD current US$) 84.0 billion N/A
Total debt service (% of exports of goods services and income) 36.0 N/A
Official development assistance and official aid (current US$) 326.8 million N/A
Workers' remittances and compensation of employees received (US$) 4.6 billion 851.0 million
Source: World Development Indicators database, April 2007