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Turkey's Economic Outlook: Solid Fundamentals and Structural Roadblocks Ahead

Explore Turkey's promising demographic trends and favorable debt dynamics contrasted with external imbalances, current account deficit, low export value, and high inflation, hinting at the need for structural reforms. Contact Melis Metiner, HSBC Economist, for insights.

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Turkey's Economic Outlook: Solid Fundamentals and Structural Roadblocks Ahead

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  1. Turkey: Solid fundamentals, structural roadblocks Melis Metiner HSBC Economist +90 (212) 376 4618 melismetiner@hsbc.com.tr Title EVENT: DATE:

  2. Turkey has a young, growing population… Source: UN, HSBC

  3. Favourable debt dynamics… Source: CBRT Source: European Mortgage Federation

  4. And a diversified economy Source: Turkstat

  5. But when it grows, it creates external imbalances… Source: Turkstat

  6. And runs a large current account deficit Source: CBRT

  7. Low domestic savings mean dependence on external financing… Source: Fitch

  8. Which makes Turkey’s growth model an unsustainable one Source: CBRT, Turkstat

  9. Exports are nominally low and low value added Source: Undersecretariat of Trade, HSBC Source: HSBC

  10. While import appetite is strong for both energy and non-energy items Source: Turkstat

  11. High (and volatile) inflation is another issue Source: CEIC, HSBC

  12. … Food inflation in particular Source: Eurostat Source: Turkstat, HSBC

  13. Labour market participation is low… Source: Turkstat Source: World Bank

  14. …And the share of unrecorded employment is high Source: Turkstat

  15. Which translates into a small tax base Source: OECD Source: Ministry of Finance

  16. Turkey faces four structural weaknesses that require structural reform

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