Lower oil prices have helped reduce the current account deficit, but major structural reforms will likely be necessary to boost growth, and much will also need to be done to restore investor confidence.
Since 1999 Turkey has recorded average annual growth of 3.9%, making it one of the best-performing emerging markets. Growth fell below 3% in 2014, but there is potential for an uptick in 2015 on the back of domestic investment and the prospect of modest growth in the Eurozone. The IMF is forecasting expansion of 3.1% in 2015 and 3.6% in 2016. While construction has been a leading source of growth in recent years, increasing by double digits in 2010 and 2011, this slowed to 2.2% in 2014. According to the Turkish Statistical Institute, the largest contributors to the economy in 2014 were manufacturing, with a 15.8% share of GDP at current prices; wholesale and retail trade, with 12%; and real estate activities, with 9.8%. Turkey’s track record over the last decade has encouraged the government to set highly ambitious growth targets for the economy. Between 2014 and 2023 the government is working to boost GDP from around $800bn to $2trn; GDP per capita from $10,400 to $25,000; and total exports from $157.6bn to $500bn.