Turkey overview

Share this page:
Turkey cityscape

The EBRD will focus on the following strategic priorities in Turkey for 2019-2024:

  • strengthening resilience of the financial sector and develop domestic capital and financial markets;
  • fostering Turkey’s knowledge economy and higher value-added activities, and promote good governance;
  • promoting economic inclusion and gender equality through private sector engagement;
  • accelerating Turkey’s green economy transition and regional energy connectivity.

As well as being a country of operation, Turkey is also a donor to the EBRD with a total contribution of €31 million. Turkey established its first bilateral donor fund with EBRD in January 2019, for an amount of €25 million.  The fund aims to support projects in Turkey, Azerbaijan, Moldova, Romania and the Kyrgyz Republic, with the potential to also support Moldova. The fund prioritises projects for SME development, financial sector stability, sustainable infrastructure, energy efficiency, governance and economic inclusion.  In 2013, Turkey provided EU funding to EBRD for its Women in Business programme.

The EBRD’s latest Turkey strategy was adopted on 24 July 2019.

Watch this video and hear from some of the people and projects we have supported in Turkey. From women entrepreneurs to small businesses, green projects as well as large scale infrastructure - we're doing more than ever before in Turkey.

More videos

Turkey's policy response to the coronavirus crisis

The EBRD is monitoring Turkey's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

Current EBRD forecast for Turkey’s Real GDP Growth in 2021 9.0%

Current EBRD forecast for Turkey’s Real GDP Growth in 2022 3.5%

The strong momentum that resulted in Turkey being one of the few countries worldwide to record a positive growth rate in 2020 carried over into 2021. Turkey reported an impressive 14.5 per cent year-on-year GDP growth rate in the first half 2021. The strong performance was driven by both domestic and external demand.
Initially there were concerns that the change in central bank governor in March 2021 might lead to a return to the unorthodox policies that had resulted in the development of significant internal and external macroeconomic imbalances; until recently these concerns appeared to be unfounded, with policy rates being maintained at 19 per cent until September.
A pickup in tourism and strong export performance resulted in the current account balance narrowing from a peak of US$ 36 billion in February to US$ 23 billion by August, and it is likely to reduce further to around 2.4 per cent of GDP by the end of the year. While gross reserves have increased to around US$ 120 billion in recent months, buffers remain heavily depleted, with net reserves standing at only US$ 26 billion. These figures need to be viewed in the context of external liabilities due within the next 12 months of around US$ 170 billion.
Inflation has remained stubbornly high and the decision to cut policy rates by 300 basis points since September caught investors off-guard, as did the decision to sack three members of the monetary policy committee in October, including two deputy governors. This action, coming on top of four changes in governor in the past two years, has resurrected questions about the central bank’s credibility, in particular the commitment to maintain tight policy to fight inflation.
This lack of policy transparency, alongside the fragile external position, makes Turkey vulnerable to changes in global investor sentiment. These risks notwithstanding, high frequency indicators suggest that activity remained robust in the third quarter of 2021, and GDP is expected to grow by 9.0 per cent in 2021, moderating to around 3.5 per cent in 2022.
Growth will continue to be driven by exports, as the support from domestic demand in the post-lockdown period wanes due to the weaker financial situation of households. There are a number of risks to the forecast, including: further Covid-19-related setbacks; the impact of higher energy prices, given Turkey’s heavy dependence on energy imports; risks associated with a premature loosening of monetary policy; the return of inflation in advanced economies; and adverse geopolitical developments.


Share this page: