Country Fact Sheet – Turkey

The global crisis has affected Turkey via three channels: trade, finance and expectations. These channels are fairly similar across the world, despite the fact that some are more important for certain countries. For Turkey, however, all the channels are important. Turkey’s exports have been reduced dramatically. Capital flows have ceased and capital outflows have accelerated. Due to frequent crises in the 1990s and early 2000s, the adverse effects of the expectations channel have also been felt strongly, in spite of the successful structural reforms in the Turkish economy since the 2001 national financial crisis. The collapse of Lehman Brothers towards the end of 2008 has often been identified as the beginning of the global financial crisis. In the last quarter of 2008, the Turkish economy experienced negative growth after 27 consecutive periods of positive growth, but still attained a positive annual growth rate for the year overall. The first three quarters of 2009 were not much different from the last quarter of 2008. The Turkish economy contracted by 4.9 percent in 2009. Economic growth in the last quarter of 2009 was announced recently, turning out to be positive and better than expected. This highly positive growth rate fosters hopes that Turkey will experience a rapid recovery from the global crisis.