The Turkish economy is going through a challenging period in which wars, geopolitical tensions and increasingly strong protectionist trends in global trade are reshaping the balance of the world economy. In this conjuncture, the Medium-Term Program covering the period 2027-2029 is not merely a technical document outlining inflation and growth targets. It is a roadmap showing what kind of production, investment, and foreign trade structure the Turkish economy aims to adopt in the next three years, too.
When we look at the details of the program, three main themes stand out: the source of growth, the business environment on which investments will be based, and the strengthening of foreign trade through new markets and logistical connections. In fact, each of these is a different part of the goal of building the Turkish economy on higher productivity, stronger production capacity, and lower external vulnerability.
Source of growth in production is changing
The new Medium-Term Program (MTP) foresees a gradual increase in growth targets. Growth, expected to be 3.3% in 2026, is targeted to reach 4.2% in 2027, 4.6% in 2028, and 5% in 2029. This path points to a framework where the effects of wars and global shocks will diminish over time, and the Turkish economy will once again approach its potential growth. However, the crucial point here is not so much how much growth will occur, but where it will come from. The fact that the growth rate of total investments has recently exceeded that of total consumption is significant in this respect. In the first quarter of 2026, investments increased by over 7% on an annualized basis, while consumption showed a more moderate trend. This picture shows that growth is intended to be supported not only by domestic demand, but also by investments that increase production capacity and productivity.
The Medium-Term Program aims to maintain a contribution of approximately
A 1 percentage point contribution from total productivity to growth. In other words, the goal is not to use more labor and capital, but to produce more and of higher quality with existing resources. At this point, technology, and especially artificial intelligence, can be one of the most important tools for increasing productivity. The policy framework for the manufacturing industry also supports this understanding via R&D expenditure.
Combating unfair competition and ensuring more effective use of public procurement in strategic sectors are also complementary elements of this framework. To illustrate, in agriculture, increasing technology and productivity, and in services, strengthening high value-added activities based on knowledge and technology, are also parts of the same approach. Industry, agriculture, and services thus converge on a higher productivity and value-added production goal.
Goal of investment: More predictable Türkiye
On the investment side, two key issues stand out: simplifying the business environment and making Türkiye more compatible with the global financial system. The program prioritizes reducing administrative burdens, simplifying legislation, digitizing public services, and increasing predictability in investment processes. Within the framework of the "Century of Türkiye Strong Hub for Investment Program," a 12.5 percentage point reduction in corporate tax for manufacturing and agricultural production, and the exemption from corporate tax for transit trade and foreign buying and selling activities, particularly in the Istanbul Financial Center (IFC), constitute the tax component of the investment attraction strategy.
The goal here is not just to attract more capital. It is to create a more competitive investment environment that will encourage global talent, entrepreneurs, technology companies, and multinational firms to relocate their headquarters operations to Türkiye.
This effort also has repercussions on the financial side. The completion of the exit process from Currency-Protected Deposits without creating exchange rate pressure, the increase in the share of Turkish Lira deposits in total deposits to 61.5%, the decrease in the country risk premium from around 700 basis points to below 220, and the increase in gross reserves to $188.2 billion are significant developments for the financial outlook.
New equation in foreign trade: Connectivity, new markets
In a period marked by increasing geopolitical risks in the global economy, weakening external demand, and the strengthening of protectionism through various means, Türkiye's export performance stands out. Annualized merchandise exports reached $280 billion, while the share of medium and high-tech products in total exports rose to 44.1%. This development shows that exports are beginning to transform not only in terms of volume but also in terms of technology and value-added composition.
However, the new conditions in global trade make it imperative for Türkiye not only to increase exports but also to diversify trade routes and markets. In this perspective, connectivity is a significant advantage. Türkiye aims to strengthen its central position in international transportation corridors by developing strategic networks that complement routes such as the Middle Corridor and the Development Route. One of the macroeconomic goals of this transformation is to reduce the current account deficit to lower levels. The current account deficit, which is already below historical averages, is projected to fall further to 1.6% by 2029. A lower current account deficit is important for reducing Türkiye’s external financing needs and its vulnerability to external shocks.
Goal: More jobs, stronger economic security, resilience
The policies implemented in production, investment, and foreign trade share a common goal: more employment and stronger economic security. The program aims to create 2.1 million additional jobs during its term and to reduce the unemployment rate to below 8%. Achieving this goal requires strengthening the alignment between the skills of the workforce and the competencies needed by the economy, increasing the participation of women and young people in the workforce, and adapting to new forms of work.
However, economic security is no longer a concept limited solely to macroeconomic stability. Strengthening supply security in energy, agriculture, water and natural resources; increasing domestic production capacity in critical technologies; improving food supply security and agricultural resilience; strengthening R& D capacity in strategic areas such as artificial intelligence and the defense industry; and making cities more resilient to disasters stand out as parts of the broader economic security approach of the MTP.
To wrap up, Türkiye has the potential to sustain its growth while reducing inflation. The real test in the coming period will be to make the gains achieved so far permanent. Whether the economic foundation created in the postwar and preelection periods can be transformed into increased production capacity, productivity, investments, and reduced external vulnerability in the next three years will be the key factor determining the success of the MTP.