Newsletters & Press

December 2021

The year 2021 ends on rather positive economic notes despite the monetary turmoil experienced at the end of the year. Indeed, after 3 consecutive quarters of record growth (7% in Q1, 21.7% in Q2 and 7.4% in Q3), the end of the year was marked by strong volatility of the Turkish currency: the dollar traded in the markets for over 16 TL on December 17 against 9.5453 TL on November 1st, a startling 72% depreciation before a sharp rebound on December 20 to be worth 13.5792 TL per 1 USD. This revival is explained by the announcement the same day of a new monetary support measures by the president which resulted in the return of investor confidence in the stock markets. Today the Turkish lira has stabilized between 10 and 11 TL per 1 USD.

Despite the currency fluctuation and inflation experienced for 2 years now, the economic rebound is well confirmed. Based on the growth performance recorded, economists' forecasts have been revised upwards and the year 2021 should end with growth of around 8 and 9.5% (against around 5% previously estimated). Characterized by a resilient economy, Turkey had already demonstrated its strength last year by being, along with China, the only G20 country not to have been in recession.

The continued depreciation of the Turkish lira during this year has strongly boosted exports. In the first 10 months of the year, exports and imports increased by 33.9% and 22.5% year-on-year respectively, reducing the trade deficit by 15.9% over this period to $ 33.9 billion. This situation has also strongly favored foreign investment. In fact, since the onset of the health crisis, the fragility of supply chains observed at the global level has encouraged large manufacturers to diversify their sources of supply outside of East Asia; Turkey, already known as a regional hub for production and re-export, is one of the big winners of this reorganization and should continue to benefit from it in the medium term. The currency depreciation has also had a positive impact on mergers and acquisitions operations, which this year recorded a record amount of $ 14 billion, 28% of which were carried out directly by foreign investors.

Finally, on the epidemic level, Turkey has taken a major step in favor of vaccination: it is now part of one of the 9 countries in the world capable of producing the anti-covid vaccine. The "Turkovac" vaccine, developed by Turkish researchers, has in fact been approved for "emergency" use. Phase 3 trials of this inactivated virus vaccine started in June with 40,800 volunteers. So far, none of those vaccinated with Turkovac have developed a severe form of Covid-19 requiring hospitalization or intensive care placement.

Turkey has recorded more than 80,000 deaths in Turkey as a result of the Covid since the appearance of the virus. Regarding vaccination data, 82.6% of the adult population (over 18 years) has a complete vaccination schedule (at least two doses of vaccines administered) according to data from the Turkish Ministry of Health.

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