Turkey’s Economy Grows 3.2% in 2024, Surpassing Forecasts

The Turkish economy expanded by 3.2% in 2024, slightly exceeding the market expectation of 3.1%, according to Turkish Statistical Institute (TÜİK) data released on February 28. The country’s GDP at current prices reached $1.32 trillion, with per capita income rising to $15,463.

Domestic and External Demand Drive Growth

Finance Minister Mehmet Şimşek emphasized the balanced nature of this growth, with domestic demand contributing 2.1 percentage points and net external demand adding 1.1 percentage points. He attributed the positive momentum to improved financial conditions, disinflation policies, and increased economic confidence.

“With our [economic] program, we have achieved significant success in many areas, reduced our vulnerabilities, and strengthened our macroeconomic foundations,” Şimşek stated.

Quarterly Performance and Sectoral Contributions

The Turkish economy grew 3% year-on-year in Q4 2024, slightly outperforming economists' predictions of 2.98%. The annual GDP growth accelerated from 2.2% in Q3 and 2.4% in Q2, after peaking at 5.4% in Q1.

On a quarterly basis, GDP rose by 1.7% in Q4, rebounding from a 0.1% contraction in Q3.

• Industry expanded 0.5% in 2024, with a 1.4% increase in Q4, though manufacturing contracted by 0.2%.
• Agriculture grew 3.9% annually and 4.7% in Q4.
• Construction recorded a 9.3% growth rate for the year.

Consumption and Investment Trends

Private consumption was a key driver of GDP growth, with households’ final consumption accounting for 59.1% of national income in 2024 and 60.5% in Q4.

• Household consumption increased by 3.9% in Q4, accelerating from 2.6% in Q3. For the full year, it rose 3.7%.
• Government expenditures, which made up 14.7% of GDP, grew 1.6% in Q4, up from 0.1% in Q3, but annual growth slowed to 1.2% from 2.4% in 2023.
• Gross fixed capital formation, a measure of investment, surged 6.1% in Q4, reversing a 0.1% decline in Q3.

Economic Outlook for 2025 and Beyond

The government targets a 4.5% GDP growth rate in 2025, with expectations that per capita income will rise to $17,028. The forecast for 2026 is even more ambitious at 5% growth.

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