Following a 5–5.5% GDP growth trajectory in 2022–2023, growth slowed to 3.2% in 2024. The main drivers of this deceleration were weak global growth and the continuation of tight monetary policy domestically.
The Turkish lira continued to appreciate in real terms in 2024, helping nominal GDP reach approximately USD 1.3 trillion. GDP per capita exceeded USD 15,000. However, this figure should be interpreted cautiously, considering the rise in global inflation in the post-pandemic period. When adjusted by the United States’ CPI, real per capita income increased, but still remained below the 2013 peak.
Thanks to the current economic program, the composition of growth improved compared to the 2022–2023 period, resulting in a much more balanced outlook between domestic and external demand. Following a sharp negative contribution in 2023, net external demand made a positive contribution to growth in 2024. Exports posted a modest increase of around 1%, hindered by weakness in Europe. Hence the improvement in net external demand was primarily driven by 4.1% contraction in imports.
Looking at the components of domestic demand, household consumption growth – previously 19% in 2022 and 13.6% in 2023 – slowed sharply to 3.7% in 2024. Public consumption expenditures rose moderately by 1.2%, a relatively modest figure compared to previous years. Despite high borrowing costs dampening machinery and equipment investments, especially during the second and third quarters, total investments rose by 3.9% in 2024, primarily due to the earthquake-induced increase in construction investments.
In summary, a demand composition emerged in which both private and public consumption slowed in line with rebalancing targets, productive investments also weakened, and construction investments remained relatively resilient. As domestic demand slowed, imports contracted sharply, while exports performed relatively well considering global weakness.
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