Economic overview: The Turkish economy consists of a mixture, on the one hand, of modern industry and commerce, and, on the other hand, of time-honored village agriculture and crafts. Since World War II, it has become increasingly integrated into the West European economic arena, for example, as a member of OECD. The economy has improved significantly since the 1994 crisis, when the economy experienced a sharp drop and inflation hit triple digits. The crisis - sparked by the downgrading in January 1994 of Turkey's international credit rating by two US rating agencies - stemmed from years of loose monetary and fiscal policies that had exacerbated inflation and allowed the public debt, money supply, and current account deficit to explode. In April 1994, then Prime Minister CILLER introduced a stabilization package that paved the way for a $950 million IMF standby loan. However, because the government missed key macroeconomic targets in 1995 and the December national election produced months of political wrangling, the IMF put the agreement - and release of remaining funds - on hold. The new center-right minority government that finally has emerged will find it difficult to balance the need for new austerity measures and tough structural reforms with the pressure for continued buoyant growth. Ankara is also likely to face internal opposition to policies it must implement as part of the Turkey-EU customs union agreement - which came into force on 1 January 1996 - because many industries are unfit for EU competition and much-needed revenues will decline with the elimination of import tariffs and surcharges. Meanwhile, Ankara's heavy debt repayment schedule in 1996 makes it necessary for Turkish leaders to bolster the confidence of both domestic and foreign investors.
GDP: purchasing power parity - $345.7 billion (1995 est.)
GDP real growth rate: 6.8% (1995 est.)
GDP per capita: $5,500 (1995 est.)
GDP composition by sector: agriculture: 15.5% industry: 33.2% services: 51.3% (1994)
Inflation rate (consumer prices): 94% (1995)
Labor force: 20.9 million by occupation: agriculture 46%, services 31%, industry 23% note: about 1.5 million Turks work abroad (1994)
Unemployment rate: 10.2% (1995 est.)
Budget:
revenues: $30.2 billion
expenditures: $35 billion, including capital expenditures of $2.8
billion (1995)
Industries: textiles, food processing, mining (coal, chromite,
copper, boron), steel, petroleum, construction, lumber, paper