COUNTRY RISK ANALYSIS-

ECONOMIC PROFILE

Turkey
 INTRODUCTION TO TURKISH ECONOMY

• Since early 2000s, Turkey’s performance on economic and social front has been
impressive, government has introduced various schemes which benefitted the poor.
• During this period, poverty fell by 50% and extreme poverty became almost
negligible.
• Turkey has rapidly urbanized, maintained strong macroeconomic and fiscal policy
frameworks, opened to foreign trade and finance and greatly expanded access to
public services.
ECONOMIC INDICATORS
 RECENT DEVELOPMENTS

• Turkey responded to Pandemic by taking measures aimed at monetary and credit expansion and large
liquidity support.
• This led to increased inflation and depreciation of Lira and vulnerability in the market.
• To address the above issues, central bank of Turkey increased the policy interest rate.
• Firms in Turkey were badly affected by covid 19. Firms responded by cutting work hours and giving
paid leaves.
• While overall labour market saw a good recovery, recovery among female, youth and low skilled
workers lagged behind.
• Turkey’s economy performance in 2020 was the best among G20 countries with GDP growing at 1.8%
in 2020.
 LOOKING AHEAD

• Recently IMF projected growth rate at 5.8 in 2021.

• Exports are expected to be a crucial factor in Turkey’s economic recovery, and it is expected to
account for two-thirds of its total growth in 2021.
• Rising inflation in major countries in the world( Ex: USA) can create pressure on developing
economies like Turkey.
• Stressed assets in banks is projected to increase in coming years. Recently authorities made
commitments to support resolution of stressed assets, yet a holistic approach is lacking.
• Just like European Union, Turkey can focus on reducing carbon footprints to make their firms
globally competitive as world markets decarbonize.
THANK YOU