Since 1973, the year when Türkiye’s export revenues first surpassed $1 billion (TL 41.5 billion), the country has undertaken numerous economic reforms. With the transition toward an export-oriented development model – a transformation that remains popular today – Türkiye has strengthened its access to foreign currency and enhanced its competitiveness. Between 2002 and 2019, Türkiye expanded its export capacity from $36 billion to $180 billion. A similar momentum was achieved in national income figures, as the country prepared to step into the trillion-dollar economy threshold. The period from 2020 to 2025, however, requires a distinct analysis.
Economy from 2020 to 2025
With the onset of the pandemic, the global economy was disrupted, triggering crises in supply chains, food and energy. The subsequent wave of global inflation had a profound impact on many countries. Amid political changes worldwide, Türkiye pursued a path centered on exports, production and balanced growth. For the first time in its Republican history, the national income exceeded $1 trillion in 2023. Similar milestones were also achieved in goods and services exports.
In 2021, Türkiye captured 1% of global exports for the first time in its history. Between 2020 and 2025, the country’s share of global exports rose from 0.96% to 1.12%, signaling a production-driven transformation. This transformation follows a trajectory similar to the Fourth Industrial Revolution and is expected to leave a lasting impact on the country’s future. A bold vision, first established in the defense industry and propelling Türkiye into the top 10 global actors in that field, is now reflected in both national income and export figures. Türkiye’s service exports stood at $39.3 billion in 2020 and are projected to exceed $120 billion by 2025. Aspiring to become a global export hub, the country has placed particular emphasis on research and development (R&D) spending. From just $1.1 billion in 2002, Türkiye has increased its R&D expenditure to $25 billion today. While national income has not grown 25-fold, policymakers have prioritized innovation and technological development.
Measured by purchasing power parity, Türkiye now ranks among the world’s top 10 countries in terms of R&D spending. At this critical juncture, it is striving to adapt to the Fourth Industrial Revolution. As a medium-high technology exporter, Türkiye is making efforts to transition into high-technology exports. With R&D centers, Teknofest events and technology-oriented firms, the country is implementing a new generation development model.
Place among others
Unlike the rapid trajectories of South Korea, Japan, Taiwan, Singapore and China, Türkiye’s path has been more gradual. Still, within its own historical context, this process should be recognized as the “Turkish model” of development, which has gained increasing prominence since the 2000s. Projections for the 2030s suggest that Türkiye may surpass countries such as South Korea, Mexico and Spain in terms of national income. According to forecasts by international organizations, the Turkish economy holds significant potential. Its strongest assets are its young population, skilled human capital and production capacity.
The 2020-2025 period is a critical phase, shedding light on the years ahead. According to IMF data, Türkiye accounted for 0.83% of the global economy in 2020, a share expected to rise to 1.4% by 2025. In the Medium-Term Program (2026-2028), Türkiye’s gross domestic product (GDP) for 2025 is projected at $1.569 trillion – a key indicator of the transformation underway in the Turkish economy. As a result of the real appreciation of the Turkish Lira, national income is increasing rapidly, inflation is declining and exports continue to rise. Forecasts suggest that by the end of the year, Türkiye’s goods and services exports will likely reach $390 billion. Improvements in the current account balance and stabilization in imports are also contributing positively to the overall outlook.
This favorable trend, reflecting a return to rational economic policies, has been accompanied by upgrades in Türkiye’s credit ratings by international agencies, which in turn continues to attract strong foreign investor interest. Between 2020 and 2025, total foreign direct investment (FDI) inflows into Türkiye amounted to $70 billion, while cumulative FDI reached approximately $275 billion. Today, more than 82,000 foreign firms operate in the country, making significant contributions to Türkiye’s export performance.
Similarly, the “Made in Türkiye” label has gained greater trust and preference compared to previous years. Türkiye, home to the world’s 12th largest manufacturing industry, exports over $220 billion worth of industrial products. Industrial design applications further highlight the country’s industrial progress: Türkiye now ranks as the world’s sixth-largest actor in this field. Having quickly joined the top 10 in recent years, the government has since maintained its position. Moreover, the gap with countries such as South Korea, Italy and Germany – ranked above Türkiye in terms of application numbers – is narrowing.
When measured relative to national income, Türkiye’s industrial design applications represent a success story. Following China and South Korea, Türkiye ranks third worldwide. Based on data from the World Intellectual Property Organization (WIPO), a United Nations agency, these rankings highlight Türkiye’s remarkable progress in industrial capacity and export performance.
Booming Turkish industry
Within Türkiye’s production infrastructure, the industrial sector can serve on a global scale. Compared to the deindustrialization of advanced economies, Turkish industry, with a production value of $420 billion and exports exceeding $220 billion, is striving to adapt to the Fourth Industrial Revolution.
The most technologically advanced segment of Turkish industry, the defense sector, is set to surpass $8.5 billion in exports this year. As the largest recipient of the country’s R&D spending, Türkiye’s defense industry is rapidly advancing relative to its global competitors and driving the technological transformation of the broader industrial base. With annual new orders exceeding $25 billion and a total project portfolio valued at $100 billion, the Turkish defense sector has become the most recognized face of the “Made in Türkiye” brand.
A similar trend can be observed in the tourism sector. According to official statements, Türkiye expects $64 billion in tourism revenues and 62 million visitors in 2025. By 2028, total tourism revenues could surpass $75 billion, potentially positioning Türkiye among the world’s top three tourism destinations.
The fact that the U.S. is seeking to establish a production hub with Baykar Technology is a critical indicator of the level achieved by Türkiye’s manufacturing industry. Equally important for the progress of the Turkish defense industry is the U.S. government’s request for the Kaan fighter jet’s engine to be produced with domestic capabilities. This fighter jet engine technology, which will make a major contribution to Türkiye’s export and technological capacity, will also pave the way for new breakthroughs in land and naval platforms in the future.
Looking ahead to the 2025-2028 period, Türkiye’s export outlook suggests that combined goods and services exports could reach $500 billion. The expected improvement in the trade balance in favor of exports, along with a positive trajectory in the current account, points to a high-tech-oriented transformation of the Turkish economy. Greater use of technology and the resulting productivity gains are also likely to have a positive impact on public tax revenues.
In conclusion, Türkiye’s export-driven development model entails a technological transformation that extends across nearly all areas of the economy, with industry at its core. If this ongoing effort succeeds, advanced economies such as South Korea and Spain could be quickly overtaken in terms of economic size, while the “Made in Türkiye” brand could rise to a higher global tier.
