According to OECD, reel GDP at PPP for Turkish economy was 2.2 trillion USD in 2017, which tripled from its level of 727 million USD in 2004. Where will Turkish economy be over the next decade or so?
PwC’s the World in 2050 projections indicated that Turkish economy will become the 12th largest economy in the world in terms of its GDP at PPP in 2030 from its level of 14th in 2016. The projections of PwC for 2050 further placed Turkish economy as the 11th largest economy in the world, reaching a GDP at PPP of 5.1 billion USD at 2016 constant prices. According to PwC’s report, Turkey has the potential to grow at an annual average rate of around 3 per cent over the next 34 years compared to 1.6 per cent on average for the G7 countries.
A Standard Chartered study on the other hand projected that Turkish economy will be the 5th largest economy in terms of nominal GDP using purchasing power parity (PPP) exchange rates by the year 2030, reaching 9.1 trillion USD. This study was based on the principle that countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per-capita GDP between advanced and emerging economies.
Two varying methodologies employed by credible institutions point an upward direction for Turkish economy’s growth projectile albeit with significant differences in projected GDP levels in 2030. TurkAnalitik’s view on the level of projected GDP in Turkish economy and its ranking in the World is a notch closer to Standard Chartered ‘s projections than PWC’s. PwC’s methodology is mainly based on continuation of some long-term historical economic growth, which, if realised, will grow Turkish economy’s GDP at PPP to little less than three trillion USD. This projectile is underrepresenting the continuous developments that have been occurring in every industry of the economy, which actually has not given its fruits fully yet. Developments such as deregulation of the energy industry, technology adoption in advanced manufacturing, and labour productivity to name a few.
TurkAnalitik believes that the benefits of all recent and upcoming market reforms across the whole economy will generate a growth rate in GDP that will surpass its long-term historical average. TurkAnalitik also note that Standard Chartered’s projection of a GDP at PPP level of 9.1 trillion USD in a little more than ten years could be a challenging level to reach however in a longer time-horizon, it is certainly going to be realised.