Economy of Turkey
The economy of Turkey is an emerging market economy as defined by the International Monetary Fund. Turkey is among the world's developed countries according to the CIA World Factbook. Turkey is also defined by economists and political scientists as one of the world's newly industrialized countries. Turkey has the world's 19th-largest nominal GDP, and 13th-largest GDP by PPP. The country is among the world's leading producers of agricultural products; textiles; motor vehicles, transportation equipment; construction materials; consumer electronics and home appliances.
Macroeconomic trends
Turkey is a founding member of the OECD and the G-20 major economies. Since 1995, Turkey is a party to the European Union–Turkey Customs Union.The CIA classifies Turkey as a developed country. Turkey is often classified as a newly industrialized country by economists and political scientists; while Merrill Lynch, the World Bank, and The Economist describe Turkey as an emerging market economy. The World Bank classifies Turkey as an upper-middle income country in terms of the country's per capita GDP in 2007. According to Eurostat data, Turkish GDP per capita adjusted by purchasing power standards stood at 64 percent of the EU average in 2018. Turkey's labour force participation rate of 56.1% is by far the lowest of the OECD states which have a median rate of 74%. 2017 was the second consecutive year that saw more than 5.000 high net-worth individuals leaving Turkey, reasons given as government crackdown on the media deterring investment, and loss of currency value against the U.S. dollar.
A longstanding characteristic of the economy of Turkey is a low savings rate. Since under the government of Recep Tayyip Erdoğan, Turkey has been running huge and growing current account deficits, reaching $7.1 billion by January 2018, while the rolling 12-month deficit rose to $51.6 billion, one of the largest current account deficits in the world. The economy has relied on capital inflows to fund private-sector excess, with Turkey's banks and big firms borrowing heavily, often in foreign currency. Under these conditions, Turkey must find about $200 billion a year to fund its wide current account deficit and maturing debt, always at risk of inflows drying up, having gross foreign currency reserves of just $85 billion.
Turkey has been meeting the “60 percent EU Maastricht criteria” for public debt stock since 2004. Similarly, from 2002 to 2011, the budget deficit decreased from more than 10 percent to less than 3 percent, which is one of the EU Maastricht criteria for the budget balance. In January 2010, International credit rating agency Moody's Investors Service upgraded Turkey's rating one notch. In 2012, credit ratings agency Fitch upgraded Turkey's credit rating to investment grade after an 18-year gap, followed by a ratings upgrade by credit ratings agency Moody's Investors Service in May 2013, as the service lifted Turkey's government bond ratings to the lowest investment grade, Moody's first investment-grade rating for Turkey in two decades and the service stated in its official statement that the nation's "recent and expected future improvements in key economic and public finance metrics" was the basis for the ratings boost. In March 2018, Moody's downgraded Turkey's sovereign debt into junk status, warning of an erosion of checks and balances under Recep Tayyip Erdoğan. In May 2018, credit ratings agency Standard & Poor's cut Turkey's debt rating further into junk territory, citing widening concern about the outlook for inflation amid a sell-off in the Turkish lira currency.
Share prices in Turkey nearly doubled over the course of 2009. On May 10, 2017, the Borsa Istanbul 100 Index, the benchmark index of Turkey's stock market, set a new record high at 95,735 points. As of January 5, 2018, the Index reached 116,638 points. However, in the course of the 2018 Turkish currency and debt crisis, the index dipped back below 100.000 in May. In early June, the BIST-100 dropped to the lowest level in dollar terms since the global financial crisis in 2008.
In 2017, the OECD expected Turkey to be one of the fastest growing economies among OECD members during 2015-2025, with an annual average growth rate of 4.9 percent. In May 2018, Moody's Investors Service lowered its estimate for growth of the Turkish economy in 2018 from 4 percent to 2.5 percent and in 2019 from 3.5 percent to 2 percent.
According to a 2013 Financial Times Special Report on Turkey, Turkish business executives and government officials believed the quickest route to achieving export growth lies outside of traditional western markets. While the European Union used to account for more than half of all Turkey's exports, by 2013 the figure was heading down toward not much more than a third. However, by 2018 the share of exports going to the EU was back above fifty percent. Turkish companies’ foreign direct investment outflow has increased by 10 times over the past 15 years, according to the 2017 Foreign Investment Index.
With policies of Recep Tayyip Erdoğan fuelling the construction sector, where many of his business allies are active, Turkey as of May 2018 had around 2 million unsold houses, a backlog worth three times average annual new housing sales. The 2018 Turkish currency and debt crisis ended a period of growth under Erdoğan-led governments since 2003, built largely on a construction boom fueled by easy credit and government spending.
In 2018, Turkey went through a currency and debt crisis, characterised by the Turkish lira plunging in value, high inflation, rising borrowing costs, and correspondingly rising loan defaults. The crisis was caused by the Turkish economy's excessive current account deficit and foreign-currency debt, in combination with the ruling Justice and Development Party's increasing authoritarianism and President Erdoğan's unorthodox ideas about interest rate policy.
On August 10, 2018, Turkish currency lira nosedived following Trump's tweet about doubling tariffs on Turkish steel and aluminum that day. The currency weakened 17% that day and has lost nearly 40% of its value against the dollar till that time. The crash of the lira has sent ripples through global markets, putting more pressure on the euro and increasing investors' risk aversion to emerging-market currencies across the board. On Aug. 13, South Africa's rand slumped nearly 10%, the biggest daily drop since June 2016. Lira crisis spotlighted deeper concerns about the Turkish economy that have long signaled turmoil long ago.
By the end of 2018, Turkey went into recession. The Turkish Statistical Institute claimed that the Turkish economy declined by 2.4% in the last quarter of 2018 as compared to the previous quarter. This followed a 1.6% drop the previous quarter. Lira shrank down to 30% against the US dollar in 2018.
In May 2019, European Bank for Reconstruction and Development released an economic outlook in which it is reported that Turkey's economy will probably see a gradual recovery of growth to around 2.5 percent in 2020.
Data
The following table shows the main economic indicators in 1980–2018. Inflation under 5% is in green.| Year | GDP | GDP per capita | GDP growth | Inflation rate | Unemployment | Government debt |
| 1980 | 155.4 | 3,491 | −0.8 % | 110.6 % | 7.2 % | n/a |
| 1981 | 177.3 | 3,896 | 4.4 % | 36.4 % | 7.2 % | n/a |
| 1982 | 194.8 | 4,168 | 3.4 % | 31.1 % | 7.6 % | n/a |
| 1983 | 212.1 | 4,278 | 0.3 % | 31.3 % | 7.5 % | n/a |
| 1984 | 234.6 | 4,624 | 6.8 % | 48.4 % | 7,4 % | n/a |
| 1985 | 252.4 | 4,863 | 4.3 % | 44.5 % | 7.0 % | n/a |
| 1986 | 275.4 | 5,190 | 6.9 % | 34.6 % | 7.7 % | n/a |
| 1987 | 310.7 | 5,731 | 10.0 % | 38.9 % | 8.1 % | n/a |
| 1988 | 328.4 | 6,158 | 2.1 % | 73.7 % | 8.7 % | n/a |
| 1989 | 342.1 | 6,323 | 0.3 % | 63.3 % | 8.6 % | n/a |
| 1990 | 387.5 | 7,002 | 9.3 % | 60.3 % | 8.0 % | n/a |
| 1991 | 404.1 | 7,158 | 0.9 % | 66.0 % | 7.7 % | n/a |
| 1992 | 438.1 | 7,633 | 6.0 % | 70.1 % | 7.9 % | n/a |
| 1993 | 484.6 | 8,308 | 8.0 % | 66.1 % | 8.4 % | n/a |
| 1994 | 467.9 | 7,896 | −5.5 % | 104.5 % | 8.0 % | n/a |
| 1995 | 512.0 | 8,507 | 7.2 % | 89.6 % | 7.1 % | n/a |
| 1996 | 557.9 | 9,130 | 7.0 % | 80.2 % | 6.1 % | n/a |
| 1997 | 610.1 | 9,837 | 7.5 % | 85.7 % | 6.3 % | n/a |
| 1998 | 635.8 | 10,106 | 3.1 % | 84.7 % | 6.4 % | n/a |
| 1999 | 623.7 | 9,773 | −3.4 % | 64.9 % | 7.2 % | n/a |
| 2000 | 680.2 | 10,509 | 6.6 % | 55.0 % | 6.0 % | 51.6 % |
| 2001 | 654.3 | 9,973 | −6.0 % | 54.2 % | 7.8 % | 76.1 % |
| 2002 | 707.0 | 10,648 | 6.4 % | 45.1 % | 9.8 % | 72.1 % |
| 2003 | 761.6 | 11,335 | 5.6 % | 25.3 % | 9.9 % | 65.7 % |
| 2004 | 858.0 | 12,615 | 9.6 % | 8.6 % | 9.7 % | 57.7 % |
| 2005 | 965.4 | 14,018 | 9.0 % | 8.2 % | 9.5 % | 50.7 % |
| 2006 | 1,065.8 | 15,284 | 7.1 % | 9.6 % | 9.0 % | 44.7 % |
| 2007 | 1,149.2 | 16,280 | 5.0 % | 8.8 % | 9.2 % | 38.2 % |
| 2008 | 1,181.6 | 16,522 | 0,8 % | 10.4 % | 10.0 % | 38.2 % |
| 2009 | 1,134.6 | 15,635 | −4.7 % | 6.2 % | 13.1 % | 43.9 % |
| 2010 | 1,245.9 | 16,900 | 8.5 % | 8.6 % | 11.1 % | 40.1 % |
| 2011 | 1,412.9 | 18,909 | 11.1 % | 6.5 % | 9.1 % | 36.5 % |
| 2012 | 1,507.9 | 19,938 | 4.8 % | 8.9 % | 8.4 % | 32.7 % |
| 2013 | 1,662.4 | 21,683 | 8.5 % | 7.5 % | 9.0 % | 31.4 % |
| 2014 | 1,779.6 | 22,905 | 5.2 % | 8.9 % | 9.9 % | 28.8 % |
| 2015 | 1,908.4 | 24,236 | 6.1 % | 7.7 % | 10.3 % | 27.6 % |
| 2016 | 1,994.0 | 24,982 | 3.2 % | 7.8 % | 10.9 % | 28.3 % |
| 2017 | 2,183.3 | 27,017 | 7.4 % | 11.1 % | 10.9 % | 28.2 % |
| 2018 | 2,299.8 | 28,044 | 2.8 % | 16.3 % | 11.0 % | 30.2 % |
Main economic sectors
Agricultural sector
As of 2016, Turkey is the world's largest producer of hazelnuts, cherries, figs, apricots, and pomegranates; the second-largest producer of quinces and watermelons; the third-largest producer of cucumbers, green peppers, lentils and pistachios; the fourth-largest producer of apples, tomatoes, eggplants, and olives; the fifth-largest producer of tea, chickpeas and sugar beet; the sixth-largest producer of almonds and onions; the seventh-largest producer of lemons, grapefruit, and cotton; and the eighth-largest producer of barley. In the year 1989, the total production of wheat was 16.2 million tonnes, and barley 3.44 million tonnes.Since the 1980s, agriculture's share in the total economy has reduced.
Turkish agriculture emits greenhouse gases and suffers from climate change in Turkey.
The country's large agricultural sector accounted for 29.5% of the employment in 2009. Historically, Turkey's farmers have been fairly fragmented. According to the 1990 census, "85% of agricultural holdings were under 10 hectares and 57% of these were fragmented into four or more non-contiguous plots." Many old agricultural attitudes remain widespread. Turkey is dismantling the incentive system. Fertilizer and pesticide subsidies have been curtailed and remaining price supports have been gradually converted to floor prices. The government has also initiated many planned projects, such as the Southeastern Anatolia Project. The program includes 22 dams, 19 hydraulic power plants, and the irrigation of 1.82 million hectares of land. The total cost of the project is estimated at $32 billion.
The livestock industry, compared to the initial years of the Republic, showed little improvement in productivity, and the later years of the decade saw stagnation. However, livestock products, including meat, milk, wool, and eggs, contributed to more than of the value of agricultural output. Fishing is another important part of the economy; in 2005 Turkish fisheries harvested 545,673 tons of fish and aquaculture.
The EU imported fruit and vegetables from Turkey worth €738.4 million up to September 2016, an increase of 21% compared to the same period in 2015, according to Eurostat data processed by FEPEX. Turkey is the EU's fourth largest non-EU vegetable supplier and the seventh largest fruit supplier. The European Commission had already started the formal process for extending the Customs Union Agreement to agricultural products, before European Union–Turkey relations deteriorated and efforts to extend and modernize the Customs Union Agreement came to a halt in 2018.
Olive production
Olio Officina Globe reported 2016 olive statistics for Turkey: There are 180 million trees covering with a production of of table olives and of olive oil. Exports are of table olives and of olive oil a year. Edremit is the main variety in northern Turkey and Memecik in the south. Gemlik is a black table olive and other varieties are Büyük Topak, Ulak, Çakır, Çekişte, Çelebi, Çilli, Domat, Edincik Su, Eğriburun, Erkence, Halhalı, İzmir Sofralık, Kalembezi, Kan Çelebi, Karamürsel Su, Kilis Yağlık, Kiraz, Manzanilla, Memeli, Nizip Yağlık, Samanlı, Sarı Haşebi, Sarı Ulak, Saurani, Taşan Yüreği, Uslu, and Yağ Celebi.Industrial sector
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. EU market share of Turkish companies in consumer electronics has increased significantly following the Customs Union agreement signed between the EU and Turkey: in color TVs from 5% in 1995 to more than 50% in 2005, in digital devices from 3% to 15%, and in white goods from 3% to 18%.Textiles and clothing
Turkish companies made clothing exports worth $13.98 billion in 2006; more than $10.67 billion of which were made to the EU member states.Motor vehicles and automotive products
The automotive industry in Turkey plays an important role in the manufacturing sector of Turkish economy. In 2015 Turkey produced over 1.3 million motor vehicles, ranking as the 14th largest producer in the world.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.
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 industry group the Automotive Manufacturers Association, or OSD, Turkey 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
, TÜVASAŞ and EUROTEM are among the major producers of multiple unit trains, locomotives and wagons in Turkey, including high-speed EMU and DMU models.Defense 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 July 11, 2002, Turkey became a Level 3 partner of the F-35 Joint Strike Fighter 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 for use by the Turkish Armed Forces and a 2m resolution reconnaissance satellite for use by the Turkish National Intelligence Organization. Other important products include the Altay main battle tank, A400M, TAI TFX, TF-2000 class AAW frigate, Milgem class corvette, TAI Anka UAV, Aselsan İzci UGV, T-155 Fırtına self-propelled howitzer, J-600T missile, T-129 attack helicopter, 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 29 million tonnes.Turkey's crude steel production reached a record high of 34.1 million tons in 2011.
Notable producers and their ranks among top steel producing companies.
- Erdemir
- Habaş
- İçdaş
- Diler
- Çolakoğlu
Science and technology
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, the largest of which was ranked 40th in the world by size. In 2016 a total of 39 Turkish construction/contracting companies were listed in the Top 250 International Contractors List prepared by the Engineering News-Record.Over half of Turkey's building stock contravenes housing regulations. An amnesty program to register illegal constructed buildings brought in $3.1billion, but the safety issues largely remain. In mid-February 2019, an 8-story building that was registered in the amnesty collapsed killing 21 people. As Turkey is prone to strong earthquakes, poor building quality is even more concerning.
Service sector
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 international airport of Istanbul is planned to be the largest airport in the world, with a capacity to serve 150 million passengers per annum., flag carrier of Turkey, has been selected by Skytrax as Europe's best airline for five years in a row. With destinations in 126 countries worldwide, Turkish Airlines is the largest carrier in the world by number of countries served as of 2016.
high-speed train of the Turkish State Railways
The total length of the rail network was 10,991 km in 2008, ranking 22nd in the world, including 2,133 km of electrified track. The Turkish State Railways started building high-speed rail lines in 2003. The first line, which has a length of 533 km from Istanbul via Eskişehir to Ankara is under construction and will reduce the travelling time from 6–7 hours to 3 hours and 10 minutes. The Ankara-Eskişehir section of the line, which has a length of 245 km and a projected travel time of 65 minutes, is completed. Trials began on April 23, 2007, and revenue earning service began on March 13, 2009. The Eskişehir-Istanbul section of the line is scheduled to be completed by 2012, and includes the Marmaray tunnel which will enter service in 2012 and establish the first direct railway connection between Europe and Anatolia.Second high-speed rail line, which has length of 212 km between Ankara and Konya become operational in 2011.
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, ranking 7th in the world. Turkey's coastline has 1,200 km of navigable waterways.
In 2008, of natural gas pipelines and 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 centers. 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. TÜBİTAK and Turkish Aerospace Industries have developed scientific observation satellites and reconnaissance satellites like the RASAT, Göktürk-1 and Göktürk-2.
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 sector
Tourism is one of the most dynamic and fastest developing sectors in Turkey. According to travel agencies TUI AG and Thomas Cook, 11 of the 100 best hotels of the world are located in Turkey. In 2005, there were 24,124,501 visitors to the country, who contributed $18.2 billion to Turkey's revenues, with an average expenditure of $679 per tourist. In 2008, the number of visitors rose to 30,929,192, who contributed $21.9 billion to Turkey's revenues. For 2011, the World Tourism Organisation reported 34,654,000 arrivals and US$25 billion in receipts for Turkey. According to the World Travel & Tourism Council, in 2012 travel and tourism made a total contribution of 10.9% to Turkish GDP and supported 8.3% of all jobs in the country. Over the years, Turkey has emerged as a popular tourist destination for many Europeans, competing with Greece, Italy and Spain. Resorts in provinces such as Antalya and Muğla have become very popular among tourists.Financial sector
The Central Bank of the Republic of Turkey was founded in 1930, as a privileged joint-stock company. It 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. All foreign exchange transfers are exclusively handled by the central bank.Originally established as the Ottoman Stock Exchange in 1866, and reorganized to its current structure at the beginning of 1986, the Istanbul Stock Exchange is the sole securities market of Turkey. During the 19th and early 20th centuries, Bankalar Caddesi in Istanbul was the financial center of the Ottoman Empire, where the headquarters of the Ottoman Central Bank and the Ottoman Stock Exchange 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.
Until 1991, establishing a private sector bank in Turkey was subject to strict government controls and regulations. On 10 October 1991 the ANAP government of Prime Minister Mesut Yılmaz gave special permissions to five prominent businessmen to establish their own small-scale private banks. These were Kentbank ; Park Yatırım Bankası ; Toprakbank ; Bank Ekspres ; and Alternatif Bank 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 very easy to establish a bank in Turkey, but also opened many loopholes in the system. In 1998, there were 72 banks in Turkey; most of which were owned by construction companies that used them as financial assets for siphoning money into their other operations.
's Bayraklı district viewed from the Aegean Sea, including the Mistral Towers and Folkart Towers, which are currently the city's tallest buildings.
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.
At present, the Turkish banking sector is among the strongest and most expansive in East Europe, the Middle East and Central Asia. During the past decade since 2001, the Turkish lira has also gained a considerable amount of value and maintained its stability, becoming an internationally exchangeable currency once again The economy grew at an average rate of 7.8% between 2002 and 2005. Fiscal deficit is benefiting from large industrial privatizations. Banking came under stress beginning in October 2008 as Turkish banking authorities warned state-run banks against the pullback of loans from the larger financial sectors. More than 34% of the assets in the Turkish banking sector are concentrated in the Agricultural Bank, Housing Bank, Isbank 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, which practice an Islamic banking, are also present in the country.
business district in Ankara
Government regulations passed in 1929 required all insurance companies to reinsure 30% of each policy with the Millî Reasürans T.A.Ş. which was founded on February 26, 1929. In 1954, life insurance was exempted from this requirement. The insurance market is officially regulated through the Ministry of Commerce.
After years of low levels of foreign direct investment, 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.
In recent years, the chronically high inflation has been brought under control and this has led to the launch of a new currency, the "New Turkish lira", on January 1, 2005, to cement the acquisition of the economic reforms and erase the vestiges of an unstable economy. On January 1, 2009, the New Turkish lira was renamed once again as the "Turkish lira", with the introduction of new banknotes and coins.
Largest companies
, Sabancı Holding, Anadolu Group, Eczacıbaşı Holding and Zorlu Holding are among the country's largest industrial conglomerates, with business operations in a multitude of different sectors.In 2014, 12 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. Banking industry leads with 5 companies in the list followed by telecommunication industry which has 2 companies in the list. There are also 2 conglomerates followed by transportation and beverages industries with 1 companies each. As of 2014, listed companies were:
| World Rank | Company | Industry | Revenue | Profits | Assets | Market Value |
| 274 | Türkiye İş Bankası | Banking | 14.58 | 2.32 | 114.27 | 9.92 |
| 288 | Garanti Bankası | Banking | 9.53 | 1.87 | 101.34 | 14.93 |
| 321 | Koç Holding | Conglomerate | 34.72 | 1.41 | 27.36 | 10.65 |
| 343 | Akbank | Banking | 7.93 | 1.69 | 90.38 | 13.24 |
| 414 | Sabancı Holding | Conglomerate | 12.96 | 0.91 | 96.15 | 8.1 |
| 534 | Halk Bankası | Banking | 6.42 | 1.57 | 61.1 | 7.94 |
| 609 | Vakıfbank | Banking | 6.27 | 0.88 | 62.94 | 4.85 |
| 666 | Turkcell | Telecommunication | 5.96 | 1.23 | 9.97 | 12.48 |
| 683 | Türk Telekom | Telecommunication | 6.92 | 0.68 | 8.49 | 9.91 |
| 934 | Enka Construction | Construction | 6.54 | 0.65 | 8.47 | 9.65 |
| 1507 | Efes İçecek Grubu | Beverages | 4.83 | 1.37 | 10.41 | 6.75 |
| 1872 | Türk Hava Yolları | Transportation | 9.87 | 0.36 | 11.82 | 4.29 |
External trade and investment
As of 2016, the main trading partners of Turkey are Germany, Russia and the United Kingdom, UAE, Iraq, Italy and China, many being top in both export as well as import. Turkey has taken advantage of a customs union with the European Union, signed in 1995, to increase industrial production for exports, while benefiting from EU-origin foreign investment into the country. In addition to Customs Union, Turkey has 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 and Tekfen, have been significant players in the country's economy.
Natural resources
Energy
The energy sector is the main source of greenhouse gas emissions by Turkey and contributes to climate change in Turkey, which is in turn affecting the economy by increasing droughts, which reduce agriculture and hydropower in Turkey. By 2020, according to Carbon Tracker, both new wind and solar power were cheaper than building new coal power plants; and they forecast that wind would become cheaper than existing coal plants in 2027, and solar in 2023: so they say that constructing Afşin-Elbistan C power station would be a waste of money.Petroleum and natural gas
Turkey is an oil and natural gas producer, but the level of production by the state-owned TPAO is not enough to make the country self-sufficient, which makes Turkey a net importer of both oil and gas.The pipeline network in Turkey included for crude oil, for petroleum products, and for natural gas in 1999. The Baku–Tbilisi–Ceyhan pipeline, the second-longest oil pipeline in the world, was inaugurated on May 10, 2005. The pipeline delivers crude oil from the Caspian Sea basin to the port of Ceyhan on Turkey's Mediterranean coast, from where it is distributed with oil tankers to the world's markets. The planned Nabucco Pipeline will also pass from Turkey and provide the European Union member states with natural gas from the Caspian Sea basin. The Blue Stream, a major trans-Black Sea gas pipeline, is operational since November 17, 2005, and delivers natural gas from Russia to Turkey. The Tabriz–Ankara pipeline is a natural gas pipeline, which runs from Tabriz in northwestern Iran to Ankara in Turkey. The pipeline was commissioned on July 26, 2001. In Erzurum, the South Caucasus Pipeline, which was commissioned on May 21, 2006, is linked to the Iran-Turkey pipeline.
Nuclear energy
To cover the increasing energy needs of its population and ensure the continued raising of its living standards, Turkey plans to build several nuclear power plants. Following the construction of experimental reactors, proposals to build large scale nuclear power plants were presented as early as in the 1950s by Turkish Atomic Energy Authority, but plans were repeatedly canceled even after bids were made by interested manufacturers because of high costs and safety concerns. Turkey has always chosen CANDU reactors because they burn natural uranium which is cheap and available locally and because they can be refueled online. Turkey's first nuclear power plants are expected to be built in Mersin's Akkuyu district on the Mediterranean coast; in Sinop's İnceburun district on the Black Sea coast; and in Kırklareli's İğneada district on the Black Sea coast.Geothermal energy
Turkey has the fifth-highest direct utilization and capacity of geothermal power in the world.Energy security
By the end of the 2010's Turkey had achieved energy security - in part by increasing regasification capacity and gas storage capacity.The proportion of renewable energy in Turkey is twice the EU average, at around 25–26%. Turkey plans to raise this to 30% by 2023.
The share of renewable energy, which serves as one of the most important pillars of the National Energy and Mine Policy and led by hydro, wind and solar energy, reached 32 percent in the third quarter of 2017, surpassing the target of 30 percent that was set for 2023.
Turkey led the way in Europe with an increase of 1.79 GW in solar capacity making the country one of the most promising markets in terms of solar business.
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 coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine, emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites, clay, arable land, hydropower, and geothermal power.Environment
Environmentalists argue that some actions to improve the environment would also benefit the economy, for example: that investing in wind and solar power would create jobs and is competitive with fossil fuels.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.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, parts of Anatolia began reaching a higher economic standard. These cities are known as the Anatolian Tigers.