Türkiye’s role in world trade: a retrospective and future outlook

Jul 8, 2024

Türkiye’s role in world trade: a retrospective and future outlook

Jul 8, 2024

Türkiye has emerged as a powerhouse in global trade, capturing the attention of markets worldwide. Nestled strategically between Asia and Europe, Türkiye’s unique position offers unparalleled access to both continents, making it a key player in international commerce. Boasting a vibrant services industry and a diverse economic landscape, the nation’s manufacturing sector is driven by an innovative and industrious population. This dynamic blend has cemented Türkiye’s status as a cornerstone of world trade, with its influence and impact continuing to grow.

Türkiye’s trade landscape in a nutshell

Diverse export package

Türkiye’s economy is diverse and complex, ranking 41st out of 133 countries in the Economic Complexity Index (ECI). This reflects Türkiye’s ability to export a wide range of goods, contributing significantly to its export volume and various sectors.

Data source: OEC

Significant growth

Türkiye’s export volume has grown steadily from 2018 to 2022, especially in high-value products. Key sectors include automotive, textiles, machinery, and electronics, with emerging strengths in chemicals and pharmaceuticals. However, to maintain sustainable growth, Türkiye needs to address its dependency on imports.

Türkiye's export value and growth

Continued growth despite global challenges and high inflation

Despite geopolitical tensions, currency fluctuations, and the global COVID-19 pandemic, Türkiye’s key industries grew from 2021 to 2024. The country maintained an average annual GDP growth rate above 5%, showing strong economic performance. Türkiye’s economy has expanded, demonstrating progress and adaptability over the years.

Even with high inflation, Türkiye’s performance remains strong. Inflation reached 65% at the end of 2023, impacting businesses and consumers. This inflation could affect Türkiye’s position in international trade. Despite this, Türkiye broke its export records, reaching over USD 255 billion in 2023, with a target of USD 400 billion by 2028.

While Türkiye shows promising growth in several sectors, addressing institutional and productivity challenges, as well as inflation, is crucial to reaching its full economic potential and export targets. Additionally, environmental challenges need attention, as the country relies heavily on carbon-intensive processes and fossil fuels. This is particularly important with the EU’s upcoming Carbon Border Adjustment Mechanism (CABM).

By focusing on sustainability, addressing economic challenges, leveraging strategic advantages, and investing in high-value sectors, Türkiye is poised to continue making significant contributions to the global market.

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