TURKEY'S ECONOMY SIGNS RECORD GROWTH OF 11% IN 2021, A FIGURE THAT EXCEEDS ALL FORECASTS
The economic rebound is confirmed: with a last quarter up 9.1% y/y. Turkey closes 2021 with double-digit growth at 11%.
According to the latest revised data, GDP grew by 7% in Q1, 21.9% in Q2 and 7.5% in Q3 last year.
Growth was driven by exports and household consumption, which contributed 4.8 and 12.5 points respectively.
The other sectors that have made the most progress are:
- Service activities: 21.1% and other services: 20.3%
- Information and communication technologies: 20.2%
- Industry: 16.6%
- Public administration, education, health and social services: 7%
- Real estate: 3.5%
Finance & insurance activities, the agricultural sector and the construction sector fell by 9%, 2.2% and 0.9% respectively.
The income per capita reached $9,539 in 2021.
This month, inflation remained the main economic concern of the Turkish authorities. It jumped to 48.7% year on year in January, its highest level since 2002. In December, consumer price inflation had reached 36.08% y/y. The rise in prices, seven times greater than the government's initial target of 13.58% in the month of December alone, is explained by the fall of nearly 45% of the Turkish lira against the dollar in one year. The decision to lower VAT from 8% to 1% on many basic food items is the latest move to counter inflation.
The Russian military intervention against Ukraine is also likely to impact on the Turkish economy, particularly on the energy sector. Turkey is indeed very dependent mostly on Russia for its gas supplies (about 33%) and a shortage would inevitably lead to a price spike. The impact of this intervention on world markets is already being felt: the price per barrel is hovering around $100 and a 42% increase in the price of gas was recorded on the European market last Thursday. On the other hand, Turkey occupies a strategic position in the gas supply routes to Europe and the consequences on the Turkish economy of a complete stoppage of supplies as a sanction remain unpredictable.
Turkey's leading economic daily "Dünya" has published a special 48-page issue, in addition to its newspaper, devoted to bilateral France-Turkey relations around a common roadmap comprising two major topical themes: the digital revolution and climate change. It is illustrated by testimonials from the French and Turkish economic ecosystem and in particular from French companies investing in Turkey and vice versa. You will find the interview of Philippe Gautier, CEO of MEDEF International for which Ilker ONUR, Executive Director of Advantis, is the Turkey correspondent. The previous edition devoted to France dates back to 2014. The entire issue is available in English and Turkish and accessible by CLICKING HERE.
Read the Newsletter (in French) in PDF format