Turkey

Travis Harrington

Overall Score: 63.2

World Ranking: 70

Quick Facts

Turkey

  • Population:
    • 76.5 million
  • GDP (PPP):
    • $1.2 trillion
    • 4.3% growth
    • 3.8% 5-year compound annual growth
    • $15,353 per capita
  • Unemployment:
    • 9.9%
  • Inflation (CPI):
    • 7.5%
  • FDI Inflow:
    • $12.9 billion

United States


  • Population:
    • 316.4 million
  • GDP (PPP):
    • $16.8 trillion
    • 1.9% growth
    • 1.2% 5-year compound annual growth
    • $53,101 per capita
  • Unemployment:
    • 7.5%
  • Inflation (CPI):
    • 1.5%
  • FDI Inflow:
    • $187.5 billion

Legal System

Turkey's judiciary functions very independently. However, the government and political process, just like anywhere else, always remains a concern in terms of corruption. The courts in Turkey are slow as well, but property rights are still generally enforced.
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Competitive Markets

Private domestic demand, the engine of Turkish economic growth, has started slowing down. In order to enhance its competitiveness, Turkey needs to focus on main weaknesses. For instance, labor market effiecency is a key flaw that Turkey possesses.
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Limits on Government Regulation

Incorporating a business in Turkey requires minimal capital expectation. Furthermore, liscensing requirements guzzle over five months on average. The labor market has a deficiency of flexibility and prevents the growth of many dynamic jobs.
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An Efficient Capital Market

The country is very open to foreign investment. However, they restrict investments in some other sectors. The evolving financial sector remains dominated by the intensive banking sector.
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Monetary Stability

Turkey's central bank raised short-term foreign currency reserve requirements for banks recently in an effort to bolster financial stability. Turkish corporations hold about 60% of the debt, and most of the rest belongs to the local banks. The move is aimed at helping banks and companies, which have been borrowing abroad at a record rate.
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Low Tax Rates

The top individual income tax rate is 35%, while the top corporate tax rate is 20%. Tax revenues account for approximately 27.7% of the domestic economy. Government expenditures equal 37.6% of domestic production. On the other hand, public debt is equivalent to 36% of gross domestic product.
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Free Trade

Turkey's average tariff rate is 2.7%. Government procurement may favor domestic firms. The largest 10 banks account for over 80% of total lending. Nevertheless, the number of nonperforming loans has increased.
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The video above shows the Turkish Prime Minister speaking on Turkey's economy. He discusses the strengths of their economy and rejects claims that Turkey faces imminent economic differences.