As a founding member of both the OECD and G20, Turkey has established itself as a key player in the global economy. By 2024, Turkey’s economy was ranked as the 17th largest worldwide and 7th in Europe by nominal GDP, while also holding the 12th largest position globally and 5th in Europe by purchasing power parity (PPP). Classified as an upper-middle-income and mixed economy, Turkey has been recognized as a newly industrialized nation since the start of the 21st century. It ranks as the world’s fifth most visited destination and boasts over 1,500 R&D centers operated by both multinational and domestic firms. Turkey is also a major global producer of agricultural products, textiles, motor vehicles, construction materials, consumer electronics, and household appliances. Among OECD nations, Turkey stands out with its robust social security system, accounting for around 12.5% of its GDP.
Over the past two decades, Turkey has experienced significant financial and social development, with rising employment and income levels since 2000. A period of strong economic expansion from 2002 to 2013 (with a brief slowdown in 2009) was followed by slower growth in dollar-based nominal GDP figures from 2014 to 2020, particularly during Turkey’s 2018 currency and debt crisis. However, nominal growth persisted, and a renewed pace of economic recovery began in 2021, reaching record highs by the end of 2023. Growth-driven monetary policies, particularly efforts to keep interest rates low (often referred to as “Erdoganomics”), have contributed to high inflation rates in recent years.
In response to upcoming environmental regulations, Turkish exporters to the European Union will face the EU Carbon Border Adjustment Mechanism by 2026 if carbon pricing is not implemented. To prepare for this, some exporters began purchasing EU Allowances in 2024 as a hedge against future carbon-related costs.
