In the first half of 2017, growth rate of Turkey increased to 5.1% from
3.2% in 2016, driven by strong fiscal stimulus. Total consumption and net
exports resulted in this above expectation growth. Although, Inflation is a big
issue at the moment. Lira’s depreciation and higher energy and food prices
pushed headline inflation to 10.7% and core inflation has reached to 10.2%. The cumulative current account deficit widened to a two-year high in
September. The widening current account deficit has become increasingly
difficult to finance, which has in turn resulted in a steady drawdown of
foreign reserves since the start of the year1.
This economic weakening and diplomatic spats resulted in Lira’s depreciation
and Turkey’s 10 year bond yields to tumble in late November.
Poverty continues to
decrease but at a slower pace than before the 2009 global crisis. GDP per
capita has increased to 10,826 US$2
and GDP per capita PPP has increased to 24,412US$3.
The availability of more and better paid jobs has been the driving force behind
poverty reduction, with social transfers playing a relatively minor supporting
role. The labour market, however, is facing challenges.
In May 2017, Unemployment
has reached to 10.2%, almost 1 percentage point higher than a year earlier.
Moreover, the jobless rate among youth (ages 15–24)
reached 19.8%, almost 2.5 percentage points higher than in May 2016.