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Nov 13, 2023

Turkey Economy: Factors and Achievements

Turkey has recently begun to spread in the media, through its great and successive achievements, especially after Turkey's powerful emergence on the global economic scene and its competition with many great countries in this field. Turkey is one of the emerging and growth-leading economies which is expected to be among the leading global growth in the next 10 years, and to provide important opportunities for investors. It has a diverse economy with a mix of modern industries and traditional agriculture.

Economy of Turkey in numbers

Turkey is a founding member of the OECD and G20. It is also classified among the E7 countries. It ranks as the 19th-largest in the world by nominal GDP, and the 11th-largest by Purchasing power parity. According to the World Bank, the middle class in Turkey rose from %18 to %41 of the total population from 1993 to 2010.


In October 2022, Turkey's annual inflation rate rose to %85.51 which was somewhat below expectations after the central bank cut interest rates despite rising prices, in an easing cycle long sought by the Turkish government. However, it started to decrease to %57.68 since the beginning of 2023, and it is expected to keep decreasing according to the plans of the Turkish government by which it is working on the development of the country and getting rid of any debts or restrictions towards the International Central Bank.


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Main Turkish economic sector

Turkey's economy has experienced significant growth recently. This growth has been driven by a number of factors, including a young and growing population, a strategic location between Europe and Asia, a large and expanding domestic market, and a relatively stable political environment. Turkey's economy is highly diversified, with major industries including:


Agricultural sector

Half of Turkey's land is dedicated to agriculture; according to official statistics, it employs 18% of the workforce, providing 10% of exports, and 7% of GDP. Turkey is the fourth largest non-EU vegetable supplier and the seventh largest fruit supplier. The major Turkish crops are wheat, sugar beet, milk, poultry, cotton, vegetables and fruit, noting that all the seeds used in Turkey are domestically produced.


Textiles and clothing

Turkey's revenues from ready-made garment exports reached record levels of $19.501 billion in 2022, which is the highest value of exports for this sector ever in Turkey's history. Therefore, ready-made garment exports have grown by 5.8 percent during 2022, achieving revenues of $19.501 billion. In terms of importing countries, Germany topped the list with $3.3 billion, followed by Spain with $2.5 billion, then the United Kingdom with $1.9 billion. Some of the biggest fashion brands in Turkey, include VakkoBeymenMavi JeansLC WaikikiDerimod, and Koton.

Motor vehicles and automotive products

Since the fifties of the last century, the Turkish government has pursued encouraging trade, monetary and tax policies that have played a great role in developing the automotive sector and attracting more international companies operating in this vital industrial field. In addition to this, Turkey's strategic location is close to major markets on three continents, and Turkey's possession of an advanced infrastructure network (sea and air ports, highways, and railroads) that helps transport and export this type of product quickly and easily is another reason for the prosperity of this sector. 


We can’t forget also the experience and significance of Turkish engineers, technicians, and manpower in the automotive industry. According to OICA, Turkey ranks as the 13th largest producer in the world and the 4th largest in Europe in terms of the auto industry. Noting that Turkey has exported its products to 193 countries on five continents, with a total value of $29 billion and $342 million in 2021. On the 29th of October 2022, the Turkish government inaugurated the Turkish national car factory "TOGG", the first local electric car to start serial production on the Turkish Republic Day anniversary, in a message that shows the size of the hopes that the Turks place on the success of this project in moving their country to the first line.

Defense industry

The defense and military industries come among the most prominent axes in Turkey Vision 2023, which witnessed great development during the past few years, as the percentage of Turkish military production doubled from 20% to 80% where it amounted to $4.4 billion in 2022, and is expected to reach $6 billion in 2023. 


On the other hand, Turkey has recently launched domestically built new military/intelligence satellites (Project Göktürk-1) and (Project Göktürk-2) for use by the Turkish National Intelligence Organization. Moreover, on the 23rd of April 2023 the local-made warship (TCG Anadolu) was launched and showed to public this warship can carry a total of 94 vehicles, in addition to 10 helicopters and 11 attack marches on its roof, while its hangar can carry 19 helicopters, besides to accommodating a crew of 1,223 people. 

Steel-Iron industry

Since the iron and steel industry provides inputs to almost all sectors of manufacturing, it plays an important role in the industrialization and development of Turkey. The first integrated steel-iron plant (KARDEMIR) first started operating in Karabük in 1939 when Turkey first produced raw steel. In order to meet the demand for flat products, the second integrated plant (ERDEMIR) started production in 1965. 


In 1977, ISDEMIR, Turkey's third integrated steel plant, came into operation to meet the demand for long-term and semi-finished products. Nowadays, the Turkish steel industry has 19 electric arc furnaces and three plants of integrated works; KARDEMIR, ERDEMIR, ISDEMIR with a total crude steel production capacity approaching 8.51 million tons per year ranking the 8th in the list of countries by steel production. Worth to be mentioned, 5 Turkish companies rank among the top steel producing companies which are:

  • Erdemir- Turkey (7.1 million tonnes) (47th) 
  • Habaş (4.4 million tonnes) (72nd)
  • İçdaş (3.6 million tonnes) (76th)
  • Diler (2.3 million tonnes) (108th)
  • Çolakoğlu (2.1 million tonnes) (110th)

Construction and contracting sector

ENR ranked Turkey second after China as the best contractor country in the world, in a list that included 250 countries in terms of the size of the global spread of its construction companies, which have adopted many major projects in the world during the last five years that have attracted foreign investors and  created a great demand for buying properties in Turkey. According to the latest data provided by the Turkish Ministry of Trade, Turkish contractors have constructed more than 10, 100 projects in 125 countries, bringing the value of Turkish construction projects to nearly 450 billion US dollars. 


Turkish construction companies were distributed across five continents, especially Europe and Asia, where we find that they led the construction of major residential and commercial construction projects in addition to airports, bridges and various national facilities. Due to this diversity and development, investors from all over the world continue to invest in Turkish real estate as it shows the huge amount of profits that they will bring back to them. 

Although the global contracting sector is going through a difficult period during the last two years, Turkish companies have been able to represent their country in the best way at the global level; during 2019 they adopted more than 438 projects in many countries, through which they achieved more than 18 billion US dollars, which is a good number compared to the revenues of foreign projects for the rest of the leading countries in the construction sector at the global level, which have been relatively affected by geopolitical developments and the challenges facing the economic world. 


Moreover, Russia, Qatar, Kuwait, Iraq, Kazakhstan, Uzbekistan, Turkmenistan, Saudi Arabia, Hungary, Serbia, Ukraine, Azerbaijan, Romania, Bulgaria, and the United States of America occupied the forefront of the countries that witnessed the largest real estate projects built by Turkish contractors. This indicates the proficiency of Turkish contractors in this field, which has become a source of strength for Turkey.

Medical tourism

Turkey has now become one of the leading countries in medical tourism, as it ranks third in the world after the United States and South Korea. The Turkish government has paid great attention to this type of tourism recently, and has established many public and private hospitals, medical centers and private clinics where the Başakşehir Çam and Sakura City Hospital that was opened late in April 2023 is considered one of the biggest Turkish medical achievements as it is the biggest medical city in Europe.


According to Daily Sabah medical tourism generated revenues of $1 billion in 2019 for Turkey's economy, with around %60 of the income being obtained from plastic surgeries. According to Glasgow Research & Consulting, there were an estimated 23 million medical tourists in Turkey in 2019, with 2.3 million traveling from the US. 


Reasons for selecting Turkey for medical tourism:

  • High quality service and advanced medical equipment
  • High proficiency medical staff.
  • Combining treatment and visiting tourist places in Turkey.
  • Low costs compared to other countries.

The most requested medical fields in terms of medical tourism in Turkey:

  • Hair Transplant
  • Neurosurgery
  • Plastic surgery
  • Dental treatments
  • Hematology-Oncology

Worth to mention, the success rate of dental treatment in Turkey is %98. The dental procedures costs in Turkey are 70% lower than in countries like the UK or the USA. Foreign patients, mainly come from Spain, the Netherlands, Belgium, the UK, France, and Middle Eastern countries like Saudi Arabia, Oman, Qatar, Kuwait, and the UAE.


External trade 

Turkey’s location along southeastern Europe and southwest Asia has been an important center for trade across continents throughout history. With its coastlines on the Black Sea, Aegean Sea, and the Mediterranean Sea, it shares land borders with Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Iran, Iraq, and Syria. 


Turkish exports are diversified, both in terms of natural resources and products including vehicles and machinery. Since the main objective in trading is profit, it is important that the products to be purchased are of high quality and cheap. The goods of countries producing cheap and high-quality products are in high demand in international trade, which is why Turkey is on the front lines in terms of commerce. 

General information about external trade in Turkey:

  • Turkish clothing exports in August 2020 recorded an increase of %10.87 compared to the same month the previous year, with an export value of one billion 545 million and 731 thousand dollars. According to the Turkish Exporters Council, more than 160 countries imported ready-made Turkish clothing during August 2020.
  • Agricultural products took the lead among the export products of Turkey, as for 70% of exports.
  • Chromium, boron, iron, copper, mercury, lead, salt, marble, sandstone, and manganese are the main sources that are exported in Turkey.
  • A very large share of Turkey's trade is about the automotive industry, as its top exports are cars, accounting for $13.2 billion.


Major economic cities in Turkey

Turkey has many major economic cities that contribute significantly to its economic growth. Some of its most important economic cities are:


Istanbul: It is the economic and financial capital of the country, with a diverse economy that includes industries such as finance, tourism, trade, and manufacturing.


Ankara: It is the administrative capital of Turkey and is home to many government agencies and ministries. It also has a growing economy that includes industries such as construction, agriculture, and technology.


Izmir: It is the third-largest city in Turkey and is an important commercial and industrial center and port. Its economy is driven by industries such as agriculture, manufacturing, and tourism.


Bursa: It is a major industrial center in Turkey and is known for its textile and automotive industries. It is also a popular tourist destination, with historic landmarks and natural beauty.


Adana: It is known for its agriculture and manufacturing industries and is also home to several universities and research centers.


Noting that other important economic cities in Turkey include Antalya, Konya, Gaziantep, and Diyarbakir.

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