ECONOMY

Turkey's dynamic economy is a complex mix of modern industry and commerce along with a traditional agriculture sector that in 2001 still accounted for 40% of employment.

It has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport, and communication.

The most important industry - and largest exporter - is textiles and clothing, which is almost entirely in private hands. In recent years the economic situation has been marked by erratic economic growth and serious imbalances.

Real GNP growth has exceeded 6% in many years, but this strong expansion has been interrupted by sharp declines in output in 1994, 1999, and 2001. Meanwhile, the public sector fiscal deficit has regularly exceeded 10% of GDP - due in large part to the huge burden of interest payments, which accounted for more than 40% of central government spending in 2003.

Inflation, in recent years in the high double-digit range, fell to 18.4% in 2003. Perhaps because of these problems, foreign direct investment in Turkey remains low - less than $1 billion annually.

In late 2000 and early 2001 a growing trade deficit and serious weaknesses in the banking sector plunged the economy into crisis - forcing Turkey to float the lira and pushing the country into recession. Results in 2002-03 were much better, because of strong financial support from the IMF and tighter fiscal policy.

Healthy growth is likely to continue through at least the first half of 2004.

Standard of Living

60% of the population earn between $100-$350 per month. The legal minimum salary is $100, but 6% of people receive less than the minimum salary.

Income Tax

25-40%

Unemployment Rate