Before the Coronavirus, Turkey’s economy was already under pressure, and now it has two years weakening lira currency, and investors are beginning to lose confidence in their currency. Turkish President Recep Tayyip Erdogan rejected any help from the International monetary fund at a time Turkey lacks economic and fiscal resources to go through the Corona pandemic.
Due to the high politicization of the Turkish Central Bank, the Feds remain reluctant to Turkish requests on dollar swap lines, thus undermining confidence in the country’s financial strength.
The lira will continue weakening as long as the investors question the credibility of the Central bank and the bank’s ability to defend its currency.
A full year recession is expected in Turkey, whose Tourism sector will collapse and fuel pressure on the weak lira, and this will, in turn, lead to inflation.
Gross Domestic Product of Turkey
The trade deficit of Turkey has been fluctuating over the years. Before 1995 Turkey exported more than they imported. In 2013 the trade deficit was at 9.8 billion usd this means they exported that amount of goods more than they imported. Over the last decade, Turkey has been importing more due to increased demand for machinery and energy.
Turkey Position on the International Trade
Let us look at the position of Turkey on the International Trade. Turkey is in a good position to handle a large number of imports and exports due to its strategic position between major seas. Turkey exports 57 percent and imports 40 percent from the European Union.
The manufacturing industry of Turkey
A large portion of the Turkish GDP is made up of the manufacturing industry, as industrial production translates to 4.59 percent of the economy in the past three decades. The manufacturing industry made up 25 percent in 2009 of the Turkish economy. The shipbuilding industry is one of Turkey’s greatest industries as it has exported goods worth $1.2 billion; currently, 56 shipyards are in development in Turkey, with 70 already developed.
Turkey and Tourism
Turkey is among the top ten most visited countries by tourists in the world, with over 30 million tourists every year except during the Corona pandemic resulting in a $23 billion income of Turkey’s economy. Tourism growth has driven Turkey to the construction of a new airport, and upon completion, the airport will be rated the largest in the world and thus reaffirming Turkey’s status as a global gateway.
Conclusion on Turkey Economic Future
Turkey’s economic future looks extremely bright if the past ten years indicate where Turkey is headed. Most developed countries were badly affected by the 2008 financial crisis, and Turkey managed to bounce back easily because it avoided greedy overinvestment like other countries. To realize more economic growth in the future, Turkey needs to strive to join the European Union to enjoy more benefits in terms of a trading partner. Turkey will continue being a major international trade partner in Europe and the World.
Turkey has the 15th largest GDP in the world, and the GDP has been doubling since 2003. Having a GDP of $304 billion in 2003 and by 2012 doubled to $773 billion, with an unemployment rate down to 10 percent shows the economy of Turkey is robust, healthy and the future is bright after the Corona-Virus. Turkey is perfectly positioned to climb the ladder in World economies as it has less dependency on imported energy sources.
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