Macro Indicators   Development Plans & Goverment Programs

9/6/2021

The Medium Term Program (OVP) for the Period of 2022-2024 Has Been Released (I)

The Turkish economy is foreseen to grow by 5.3 percent per annum on the average in the 3-year period. The growth rate is targeted to be 9 percent in 2021, 5 percent in 2022 and 5.5 percent in 2023 and 2024. The implementation of inflation targeting will be continued to safeguard price stability on a permanent basis. Monetary policy instruments will be employed by the Central Bank by observing price stability targets depending on the outlook of inflation rates. The annual inflation rate expected to be 16.2 percent in 2021 is targeted to be reduced to 7.6 percent at the end of the program period. The unemployment rate estimated to be 12.6 percent in 2021 is aimed to be reduced to 10.9 percent in 2024. The current account deficit having reached $ 37.2 billion in 2020 is targeted to come down to $ 21 billion in 2021 to be further reduced to $ 10 billion in 2024…

The process of attracting international investments will be devised also considering the targets and actions as stated in the Green Deal Action Plan…

The 3-year road map of Turkey for the period of 2022-2024 prepared by the Ministry of Treasury and Finance and the Strategy and Budget Department is published in the extra edition of the Official Gazette dated September 5, 2021 once again titled as the Medium Term Program (OVP) as before and put into effect accordingly.

The Gross National Product (GDP) is foreseen to be $ 801 billion in 2021 aiming to exceed $ 1 trillion at the end of the term. Per capita income is estimated to be $ 9,489 in 2021 which is targeted to reach $ 11,465 in 2024.

A growth rate of 5.3 percent is targeted in the 3-year period

The Turkish economy is foreseen to grow by 5.3 percent per annum on the average in the 3-year period according to the OVP. The growth rate is targeted to be 9 percent in 2021, 5 percent in 2022 and 5.5 percent in 2023 and 2024.

A technological transformation will be in effect in the industry, primarily in sectors as defined in the Eleventh Development Plan to safeguard a more productive and competitive structure. The implementation of a development model will be continued observing macroeconomic balances, supported by structural reforms to achieve a qualitative, inclusive and sustainable growth rate.

Hi-tech fixed capital investments in the industrial sector and direct foreign investments will be encouraged maintaining and empowering macroeconomic stability, a regulatory framework and a business climate. The simplification process will be continued in the investment incentive system.

The proportion of the current account deficit to the GDP is targeted to come down to 1 percent at the end of the term

The global economy is foreseen to continue grow in an accelerated manner in 2022 to be accompanied with the global trade volume. The trading of services led by rapidly growing sectors such as software besides the trading of commodities and tourism is expected to recover as the sharp increase observed in commodity prices tends to weaken next year. The increase in commodity exports is foreseen to be continued in the coming period as the proportion of the current account deficit to the GDP is targeted to come down to 1 percent in 2024 gradually upon an increase in revenues from the services sector upon implementation of policies and measures to curb foreign dependence in imports.

Preferential Trade Agreements and Free Trade Agreements and primarily the Customs Union are aimed to be updated with extended scopes also encompassing the trading of services and digital trade.

The current account deficit having reached $ 37.2 billion in 2020 is targeted to come down to $ 21 billion in 2021 to be further reduced to $ 10 billion in 2024.

The inflation rate is targeted to be reduced to 7.6 percent at the end of the term

The implementation of inflation targeting will be continued to safeguard price stability on a permanent basis. Monetary policy instruments will be employed by the Central Bank by observing price stability targets depending on the outlook of inflation rates in this respect.

The increase in the Consumer Price Index (CPI) expected to be 16.2 percent in 2021 is targeted to be reduced to 7.6 percent in 2024.

Unemployment

Employment is targeted to increase by 1,170,000 people per annum on the average during the term of the program thus decreasing the unemployment rate gradually. Awareness will be introduced in future jobs primarily in the digitalization and green transition areas. Innovative educational and sectoral cooperation will be enhanced to strengthen the education-employment-production scheme.

The unemployment rate estimated to be 12.6 percent in 2021 is aimed to be reduced to 10.9 percent in 2024.

Financial stability

Financial stability is aimed to be supported by means of an increase in savings in the financial system, providing efficacy in the distribution of resources, easing access to financing means upon development of capital markets and the generalization of financial literacy.

Green Transition is now in the OVP

The OVP includes policies and measures regarding the Green Transition for the first time. Integration with global value chains and attracting a higher amount of international investment will be devised also considering the targets and actions as stated in the Green Deal Action Plan.

New approaches supporting the green transition and transitional economy in the fields of industry, trade, transportation, environment and energy will be put into life within the framework of support and credit support mechanisms also considering foreign finance amenities. Necessary technologies for green production will be developed and generalized also by supporting R&D activities to step up the green transition process. The regulatory framework of the financial sector will be devised to enable the easement of green transition of the industry.

The 3-year macroeconomic targets as listed in the OVP are as follows:

GT: Realization Estimate; P: Program