Have successive crises affected the Turkish economy?

According to reports from the International Monetary Fund, Turkey’s economy is considered an emerging market economy. 

Economists and political scientists define Turkey as one of the most modern industrialized countries in the world.

With a population of 83.4 million as of 2021, Turkey ranks 20th in terms of nominal GDP in the world and 11th in terms of GDP by purchasing power parity.

The Turkish state is among the world’s leading producers of agricultural products, textiles, vehicles, transportation equipment, building materials, consumer electronics, and household appliances.

Turkey’s economic and social development since the early 2000s has been impressive, increasing employment and investment opportunities and making Turkey an upper-middle-income country. During this time, Turkey rapidly urbanized, maintained macroeconomic solid and fiscal policy frameworks, opened up to external trade and finance, passed many laws and regulations with EU standards, greatly expanded public service projects, and recovered well from the global financial crisis in 2008. /2009.

Turkey’s economy after Corona and the depreciation of the Turkish lira

In the past few years, growing economic vulnerabilities and a more challenging external environment have threatened to undermine these achievements.

In addition, in the past two years, Turkey, like the rest of the world, has suffered from the consequences of the general lockdown due to the Corona pandemic, which has dramatically affected Turkey’s economy.

It witnessed an accelerated economic recovery in 2021 amid the COVID-19 pandemic and heightened macro-financial volatility, which had impacts on both individuals and society.

After easing restrictions, Turkey entered the fourth wave of infections, driven by the delta variable, in early July. The expansion of COVID-19 cases in the second half of 2021 followed a similar path for many European countries and the United States of America.

The recent increase in the number of cases has not led to the reintroduction of strict measures thanks to lower death rates. The roll-out of the accelerated vaccine has also helped increase the total adult vaccination rate in Turkey to more than 84 percent as of January 2022.

In this recovery period, the economy grew 11.7 percent year on year in the first three quarters of 2021, supported by external and domestic demand; The external and fiscal balance improved, and unemployment decreased.

However, the value of the lira plunged to record lows in the last quarter of 2021, losing more than half its value by early December before rebounding in value, but it has remained volatile.

After very high growth in 2021, the development of the Turkish economy in 2022 is expected to be driven mainly by the continued strong recovery in exports.

This growth is also expected to continue with the increase in external demand, which will raise net exports to more than two-thirds of the change in 2022.

On the production front, the service sector is expected to increase its contribution to economic growth in 2022-2023.

The service sector will also achieve about two-thirds of the growth in 2022 on the back of a strong recovery in the tourism sector.

In addition, the Turkish real estate sector witnessed a strong movement in the second half of last year, which also contributed to maintaining the balance of Turkey’s economy.