|
|
|
CURRENT SITUATION OF TURKISH ECONOMY
Main economic indicators in Turkey have been recovering and stability has been achieved in many areas especially in the last two years. Structural reforms within the framework of the IMF program, EU Harmonization Laws and sector regulations along with improvements in the investment environment have provided a more favorable business environment.
MAIN ECONOMIC INDICATORS
Turkish economy has recorded a very high growth rate in 2004 with GNP increasing 9.9% and GDP 8.9%. Turkey's GNP has risen to 300 billion USD in 2004. Per capita GNP has increased from 3,383 USD in 2003 to 4,172 USD in 2004 while PPP adjusted GNP per capita has reached to 7,736 USD.
Growth Rates of Gross National Product and Gross Domestic Product
(% Change by 1987 Constant Prices) 
Looking at the GNP by expenditures, private sector expenditures increased by 10.1% while public sector expenditures rose only by 0.5%. Gross fixed capital formation has increased by a remarkable 32.4% in 2004.
GNP By Sectors (2004) (% Share in Total Product) 
In 2004, the growth of industrial value added was realized as 9.4% which has a share of 25% in total GNP. The growth in manufacturing and utilities has been 10.1% and 6.1% respectively, while mining sector grew by 2.6%. Transport and communications sector became the most rapidly growing sector by 12.8% increase.
Change in Industrial Production Index (1991-2003) (1997=100) 
Manufacturing industry gained a momentum particularly in office and computing machinery with a 79.3% increase and motor vehicles growing at a rate of 53.3% in 2004.
|
Employment and Labor Force
Turkey's civilian labour force is 24.3 million people as of end of 2004. Agricultural sector still employs around 1/3 of the labour force although share of agriculture in GNP is just above 10%. Nearly half of the employed are in the services sector and the ratio employed in the industrial sector is 18%. |
Public Sector Indicators
The ratio of central government budget revenues in GNP has increased from 28.1% in 2003 to 28.5% in 2004, while the ratio of expenditures decreased from 39.4% to 35.5%.
Share of Revenues and Expenditures in GNP 
Due to substantial external borrowing from international institutions in 2001 and 2002, the ratio of public external debt stock to GNP ratio has increased rapidly. In 2003-2006, the following measures and policies will be implemented in order to lower public debt stock. Important regulations were adopted in order to ensure fiscal discipline and transparency in public fiscal management. In this framework;
a single borrowing authority was determined,
borrowing, guarantee and loan limits were determined,
the external project credits monitored outside the scope of the budget were taken into the scope of the budget,
an approval process was introduced for public external borrowing without guarantee,
a risk account was created in accordance with a budget-based fiscal risk.
Primary surplus target of 6.5% of GNP has been met both in 2003 and 2004. As a result of tight fiscal policy and effective public debt management, net public debt stock to GNP ratio has come down from 91% in 2001 to 70.5% in 2003 and to 63.5% in 2004 reflecting a sustainable debt stock view. The primary target of the program is to further diminish this ratio in the following years. |
Balance of Payments
Current account deficit almost doubled in 2004 and reached USD 15.6 billion USD corresponding to a historical high of 5.2% of GNP. In 2004, foreign trade deficit was 23.9 billion USD widening 84% compared to the previous year. Thus, the main factor in the rise of the current account deficit was the increase in imports and deteriorating trade balance. Growing economy activity fuelled imports through capital and intermediate goods imports. Exports were also strong however they increased at a lower pace compared to imports. Tourism revenues helped compensating by generating a revenue over 15 billion USD. In the capital and financial accounts, 16.8 billion USD inflow was recorded. FDI remained still at an insignificant level of 2.6 billion USD against the 1.7 billion USD in 2003. Current account deficit was financed mainly by portfolio investments amounting to 8.1 billion USD.
|
Monetary Indicators
As a result of the dedication to the economic program and the structural reforms, a significant success was accomplished in the struggle against inflation. The rate of increase in the wholesale price index (WPI) decreased from 88.6% in 2001 to 30.8% in 2002 and finally to 13.8% in 2004, while the consumer price index (CPI) went from 68.5% in 2001 down to 29.7% in 2002 and to finally single-digit level of 9.3% in 2004. The new Turkish Lira (6 zeros removed) has been launched as of the beginning of 2005. This is expected to further contribute to the monetary stability. The main factors played important role in the reduction of inflation can be summarized as follows:
maintaining fiscal discipline
implementing wage and salary adjustments in the public sector
strict adherence to the tight monetary program
|
|
Homepage 
Turkey in Brief
CURRENT SITUATION OF TURKISH ECONOMY
