Turkey’s economic ranking declines

According to the year-end report of the World Economic League Table (WELT) based on IMF data, Turkey has dropped two places among the world’s 20 largest economies – from 17th in 2013 to 19th in 2014. The country’s economic decline is linked to a combination of factors, including devaluation of Turkey’s currency, Lira, against the US dollar tops the list.
Other issues that have negatively impacted Turkey’s economy include domestic and regional tensions, ongoing conflicts in neighboring countries, and high unemployment levels during 2014. All that led Turkey’s national income to drop from 827 billion dollars in 2013 to 767 billion dollars in 2014. It is predicted that Turkey’s economic boom of the past decade will become slower during the next 10 years as a result of lower foreign capital inflows and slower domestic credit growth. The expectation is that reliance on short-term foreign capital inflows will continue. Also, political uncertainty and social tensions are expected in the run up to general elections in 2015. The International Monetary Fund recommends that Turkey should revise its annual medium-term growth on current policies in order to contain inflation. Nevertheless, the WELT report forecasts that Turkey is likely to rank 16th among world economies by 2024, and 14th by 2030. Even if Turkey focuses on rebalancing the economy, reducing the external deficit and lowering inflation to encourage a positive outlook as the IMF suggests, forecasts predict that Turkey’s vision to be among the world’s top ten economies by 2023 will remain out of reach.