Newsletters & Press

January 2024

The year 2023 ends with a rather recessionary economic tone on a global scale, not sparing Turkey. However, it has gained two places in the world economic ranking according to the IMF (International Monetary Fund), moving from 19th to 17th place, demonstrating once again its resilience.

Inflation continues to be the country's main economic concern: its annual rate has reached 64.8% over one year, a figure which remains high but which is expected to decrease in 2024 given the increase in the key rate since June 2023, increased from 8.5% to 42.5%. This tightening of monetary policy should bring inflation back to 36% at the end of 2024, according to the Turkish central bank, which estimated at the end of December that Turkey is now “close to the level required to set the course for disinflation”.

This inflation accentuates the depreciation of the Turkish lira which, although weakened against the euro and the dollar, continues to be a factor of attractiveness for foreign investors but also for buyers. Turkey's exports thus reached a record level of 255.8 billion USD (+0.6%) compared to the previous year. The coverage ratio of exports to imports gained 0.8 percentage points to reach 70.7% in 2023. The country's foreign trade deficit narrowed by 3.2% year-on-year. Turkey now aims to further increase its exports in 2024 to reach over USD 375 billion.

On the internal political side, the campaign for the municipal elections of March 2024 has officially begun. All eyes are on Turkey's two largest cities, Ankara the administrative capital and Istanbul the economic capital, which passed into the hands of the opposition in 2019 and for which the ruling party is implementing a reconquest strategy.

Finally on the geopolitical level, Turkey asserts a presence in thorny international issues and has been able to position itself as a mediator, whether it concerns questions surrounding the Mediterranean, Sweden and Finland in NATO, Upper Karabach, Ukraine or Syria. Turkey also affirms its position against Israel and intends to maintain a “moral, rational and effective foreign policy” according to statements by Foreign Minister Hakan Fidan.

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