Turkey Economy—overview: Turkey's dynamic economy is a complex mix of modern industry and commerce along with traditional village agriculture and crafts. It has a strong and rapidly growing private sector yet the state still plays a major role in basic industry banking transport and communication. Its most important industry—and the largest source of exports—is textiles and clothing which is almost entirely in private hands. The current economic situation is marked by strong growth coupled with serious imbalances. Real GDP expanded by about 7% in 1997 but inflation rose to 99% at yearend and the public sector fiscal deficit probably remained near 10% of GDP. To some extent Ankara is caught in a vicious fiscal circle because about half of all central government revenue is going to pay interest on the national debt. The government that took office in July 1997—headed by Prime Minister YILMAZ's Motherland Party—enacted a 1998 budget that includes substantial tax increases and cuts in non-interest spending but these gains will be offset by a jump in interest payments. The government also is planning to overhaul the social welfare and tax systems and to speed up privatization although these reforms will face tough political opposition. Ankara is trying to increase trade with other countries in the region but most of Turkey's trade is still with OECD countries. Despite the implementation in January 1996 of customs union with the EU foreign direct investment in the country remains low—about $0.5 billion annually—perhaps because potential investors are concerned about high inflation and the unsettled political situation. Economic growth will slow in 1998 to perhaps 4% and inflation should decline although the government's 50% target appears overoptimistic. The current account deficit probably will remain small—1% to 1.5% of GDP - when Turkey's unrecorded "suitcase" exports are included. GDP: purchasing power parity—$388.3 billion (1997 est.) GDP—real growth rate: 7.2% (1997) GDP—per capita: purchasing power parity—$6 100 (1997 est.) GDP—composition by sector: agriculture: 15% industry: 28.4% services: 56.6% (1996) Inflation rate—consumer price index: 99% (1997) Labor force: total: 21.6 million by occupation: agriculture 43.1% services 30.1% industry 14.4% construction 6.0% (1996) note: about 1.5 million Turks work abroad (1994) Unemployment rate: 5.9% another 5.1% officially considered underemployed (April 1997) Budget: revenues: $38.5 billion expenditures: $52.9 billion including capital expenditures of $4.2 billion (1997) Industries: textiles food processing mining (coal chromite copper boron) steel petroleum construction lumber paper Industrial production growth rate: 10.8% (1997 est.) Electricity—capacity: 21.83 million kW (1997) Electricity—production: 103 billion kWh (1997) Electricity—consumption per capita: 1 636 kWh (1997) Agriculture—products: tobacco cotton grain olives sugar beets pulses citrus; livestock Exports: total value: $26 billion (f.o.b. 1997); note—substantial unrecorded exports estimated at $5.8 billion commodities: textiles and apparel 37% iron and steel products 10% foodstuffs 17% (1997) partners: Germany 20% US 8% Russia 8% UK 6% Italy 5% (1997) Imports: total value: $46.7 billion (f.o.b. 1997) commodities: machinery 26% fuels 13% raw materials 10% foodstuffs 4% (1997) partners: Germany 16% Italy 9% US 9% France 6% UK 6% (1997) Debt—external: $84.5 billion (September 1997) Economic aid: recipient: ODA $195 million (1993) Currency: Turkish lira (TL) Exchange rates: Turkish liras (TL) per US$1—212 500 (January 1998) 151 600 (1997) 81 405 (1996) 45 845.1 (1995) 29 608.7 (1994) 10 984.6 (1993) Fiscal year: calendar year
|