Another balance of payments crisis is looming, just two years after 2018


SENSITIVE RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD766,5091bn (World ranking 19, World Bank 2018)
Population 82.32mn (World ranking 19, World Bank 2017)
Form of state Republican Parliamentary Democracy
Head of government Recep Tayyip ERDOGAN (President)
Next elections 2023, presidential and legislative
  • Important geostrategic position (that has historically always ensured aid when needed)
  • Solid public finances
  • Adequate business environment (though deteriorating)
  • Potential as regional hub between Europe, MENA and Asia
  • Exchange rate vulnerability to domestic and external shocks
  • Economic policy responsiveness
  • History of persistently large current account deficits, largely financed through short-term external debt, which has risen to a very high level in the meantime
  • (External) debt refinancing risk of weaker companies and banks, exacerbated by the currency crisis in 2018-2019 and again by the Covid-19 crisis in 2020
  • Deep-rooted division in society between secularists and religious conservatives
  • Geopolitical risks

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 9%
12% China
United Kingdom 7%
10% Germany
Iraq 6%
10% Russia
Italy 5%
5% United States
United States 4%
5% Italy

Trade structure by product

(% of total)

Exports Rank Imports
Road vehicles 14%
9% Road vehicles
Articles of apparel & clothing accessories 11%
6% Electrical machinery, apparatus and appliances, n.e.s.
Textile yarn and related products 8%
5% Other industrial machinery and parts
Electrical machinery, apparatus and appliances, n.e.s. 6%
5% Iron and steel
Gold, non-monetary (excluding gold ores and concentrates) 6%
4% Plastics in primary forms
The payment behavior of domestic firms has a significant margin for improvement and normal payment terms seem excessive. In fact, as a result of the trend in long payment duration, the value of unpaid receivables has grown considerably in recent years.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings


Domestic courts lack independence, the rule of law perception is moderate, and the chances of obtaining payment through legal action are lower than through strong pre-legal negotiation efforts.

Debt renegotiation proceedings before the courts are not generalized and when it comes to insolvency issues, liquidation remains the default proceeding even though liquidation sales rarely yield efficient results and may not be in the creditors’ best interest.

Contact Euler Hermes

Economic Research Team


Contact Manfred Stamer

Senior Economist for Emerging Europe and the Middle East