Turkey
We expect the economy to expand by 5.8% overall in 2021 – one of the best outturns in CESEE – before growth slows to around 3.5% per year over the rest of the forecast period. Credit expansion will remain robust, but is unlikely to drive growth to the same extent as it has over the past 12 months. Manufacturing should continue to perform strongly in 2021, helped by the recovery in the global economy and the weaker lira; but the tourist industry looks to be in for another difficult year. Despite continued high inflation, monetary policy is likely to be eased; this may well boost short-term growth, but it will also increase external vulnerabilities, particularly as US dollar interest rates rise.
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Population, 1000 persons | 81407 | 82579 | 83385 | . | . | . |
| GDP, real change in % | 3.0 | 0.9 | 1.8 | 5.8 | 3.4 | 3.5 |
| GDP per capita (EUR at PPP) | 19160 | 18540 | 19000 | . | . | . |
| Gross industrial production, real change in % | 1.1 | -0.6 | 2.2 | . | . | . |
| Unemployment rate - LFS, in %, average | 11.0 | 13.7 | 13.2 | 13.0 | 12.3 | 11.1 |
| Average gross monthly wages, EUR | 494 | 511 | 466 | . | . | . |
| Consumer prices, % p.a. | 16.3 | 15.2 | 12.3 | 16.0 | 12.0 | 10.0 |
| Fiscal balance in % of GDP | -2.8 | -3.2 | -2.8 | -3.5 | -2.5 | -2.5 |
| Public debt in % of GDP | 30.2 | 32.6 | 39.5 | . | . | . |
| Current account in % of GDP | -2.7 | 0.9 | -5.2 | -3.8 | -3.6 | -3.5 |
| FDI inflow, EUR m | 10975 | 8274 | 6822 | . | . | . |
| Gross external debt in % of GDP | 58.8 | 57.0 | 58.5 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of April, July and November.
See Press Conferences.
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Monthly Report No. 7-8/2021
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures
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TURKEY: Back to boom and bust
Richard Grieveson
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 131-135
Details and Buy
Turkey was hit by a severe wave of COVID-19 infections during the spring, but strict lockdown measures resulted in an improvement in the public health situation in May and June. Consumer price inflation rose above 17% in April, and the lira has continued to weaken against the euro and the US dollar. Despite these challenges, the economy remains resilient, with double-digit year-on-year industrial output and retail trade growth in the early months of 2021, and a real GDP expansion of 7% in Q1. We expect the economy to expand by 5.8% overall in 2021 – one of the best outturns in CESEE – before growth slows to around 3.5% per year over the rest of the forecast period. Credit expansion will remain robust, but is unlikely to drive growth to the same extent as it has over the past 12 months. Manufacturing should continue to perform strongly in 2021, helped by the recovery in the global economy and the weaker lira; but the tourist industry looks to be in for another difficult year. Despite continued high inflation, monetary policy is likely to be eased; this may well boost short-term growth, but it will also increase external vulnerabilities, particularly as US dollar interest rates rise.