In the present economic situation (2009), Turkey appears as a country with several fragile economic sectors. It is an open question whether foreign investments, very important to the economic progress over recent years, will continue to find Turkey interesting, even safe.
Economic growth has slowed down the last few years, and inflation seems to be climbing again. Still this is far below the levels of 1990's and early 2000's, when it could reach around 100% a year. 2007 figures were 10%.
Turkey's economy has over recent decades become more and more diversified. Modern industries, many active in exports have become common in large parts of the country. Industries of Turkey are more aiming at exports than most other countries in the Middle East, but is small compared to European levels. The main contributor to the GNP was industry, though, making up more than 30%.
The main sectors of Turkey's industries are textiles and clothing, employing one of three industry workers. This is, however, a sector of heavy international competition, and more exposed to cheap countries with the end of the global quota system.
New industries, like the production of automotive and electronics industries, are quickly gaining ground.
Agriculture and Fishing
Agriculture remains the largest employer, and although more effective than before, it is far behind European standards in modernization. Many farms are small, employing only the family that owns it.
Fishing makes up another important part of the economy, the catch is almost 100 kg/inhabitant/year. A major part of this is exported.
Imports and Exports
Turkey remains a country of great import/export deficits, 2008 figures are at -31%.
The main export markets are in Europe, Germany at 11% and Great Britain at 8%. The main countries Turkey imports from are Russia with 14% and Germany with 10%. Main products for export are apparel, foodstuffs, textiles, metal manufactures and transport equipment. Main products for import are machinery, chemicals, semi-finished goods, fuels and transport equipment.
Living standards have gone up and down over recent years. Following reforms in 2004, growth rates have been good. In 2004, 9%, until 2007, about 5% year. Growth rate fell to 1.5% in 2008.
Economy on the level of ordinary Turks, have worsened in the last years, as inflation has been at the level of 100% or more, while normal wages have been risen at a lower speed. There have been serious measures on trying to bring the Turkey's foreign debts down, which means that a large part of the national production has been sent out of the country.
The remittances coming home from Turks working abroad, mainly in Germany and Saudi Arabia, is important, but doesn't count for more than 2-3% of GNP.
The state economy remains in need of IMF backing, and faces challenges of high budget deficits and external debt. State budget 2008 had a deficit of US$11.7 billion, or 6.4%.
Turkey has some production of oil and natural gas, but far less than domestic demands. Oil production covers only 6% of national consumption, natural gas 2.4% (2007 figures).
Health of currency
Passing the 1 million lira to a single US dollar in the early 2000's, Turkey's currency was more than ripe for a reform. This came about on January 1, 2005 when the Turkish lira (TRL) was converted to New Turkish lira (TRY) at a rate of 1,000,000 old to 1 new Turkish lira.
On January 1, 2009 the word "New" was dropped from the currency, it is now simply known as Turkish lira. So far, the Turkish lira has been farily stable to major world currencies, falling some, but appearing no more exposed than most other currencies in the turbulent times since late 2008.