Early deindustrialization and risk of contraction in production in the Turkish economy
Factors such as high inflation, high interest rates, and an overvalued TRY have caused the manufacturing sector's share in national income and employment to decline, triggering the risk of early deindustrialization in the Turkish economy.
Due to factors such as high inflation, high interest rates, and an overvalued Turkish Lira, the process of early deindustrialization—meaning the decline of industry before sufficient enrichment is achieved—poses a risk to the Turkish economy.
Decline in the Share of Industry and Manufacturing
According to TURKSTAT data, the total share of the industrial sector in national income has experienced a significant decline, dropping to lower levels. The share of the manufacturing industry in gross domestic product has also decreased during this period.
Growth of the Services Sector
The Turkish economy continues to shift towards service sectors such as finance, accommodation, health, and transportation. The share of the services sector in total national income has exceeded sixty percent.
Assessments by Experts and the Business World
Koç University faculty member Prof. Dr. Kamil Yılmaz stated that industry has entered a bottleneck during the disinflation period, with an increasing number of companies shutting down capacity or relocating their production. TÜRKONFED President Süleyman Sönmez emphasized that this situation is not cyclical but a strategic risk.
Losses in the Labor Market
The contraction in industry has also directly negatively impacted the labor market, leading to a drop in employee numbers. Basic data revealed that thousands of people have lost their jobs in the industrial and manufacturing sectors, and total employment has declined.