Turkey's Wide-Ranging Reform Plan for 2025-2027

Turkey has introduced a comprehensive policy agenda for 2025-2027, focused on improving the business environment, enhancing investor confidence, and supporting economic modernization.

Policy Framework for Growth and Productivity in 2025-2027

The policy framework for the 2025-2027 period is designed to foster economic growth through targeted investments in key productive sectors, focusing on increasing total factor productivity.  Total factor productivity, a critical driver of long-term growth and welfare, is expected to be a substantial contributor during this period. Macroeconomic stability and structural reforms will be essential in boosting productivity across agriculture, industry, and services. These efforts aim to generate sustainable, inflation-free growth, with a projected increase in Turkey's GDP (Gross Domestic Product) to 3.5% in 2025, 4.5% in 2026, and 5% in 2027.

Investment and Innovation Reforms

Encouraging investments will rely on regulatory reforms to enhance investor confidence and streamline business processes. Public financial adjustments will support these reforms, facilitating structural transformations. A specific focus will be placed on fostering innovation, renewing key sectors, and building a strong research and development (R&D) infrastructure. For medium and large enterprises, the focus will be on developing supply chains, particularly through green and digital transformation initiatives, elevating the role of private sector investments in driving sustainable economic growth.

Green Transformation for Sustainable Growth

Green transformation policies will be key to promoting sustainable growth. The focus will be on expanding the use of renewable energy, improving energy efficiency, and aligning with global environmental regulations. The completion of a comprehensive regulatory framework for climate change, including the Second National Contribution Declaration, will set clear targets for reducing greenhouse gas emissions. Additionally, the Green Finance Strategy and Action Plan will align Turkey with international green taxonomy standards.

Strengthening the R&D Ecosystem

Turkey's R&D ecosystem will be bolstered by expanding the number of R&D centers and Technology Development Zones, fostering innovation and entrepreneurial activity. Mechanisms for evaluating intellectual property will be enhanced, and large-scale R&D firms will be encouraged to focus on advanced technologies to improve competitiveness. High-tech industries and small and medium-sized enterprises (SMEs) will receive targeted support to boost their capabilities and drive growth.

Accelerating Digital Transformation for Economic Sustainability

Digital transformation policies will be fast-tracked to ensure sustainable growth. Special attention will be given to supporting SMEs in adopting digital technologies. Strengthening cybersecurity, improving public administration, and enhancing public services through digital technologies will be critical components of this strategy. Efforts to develop the semiconductor industry will focus on improving research, design, production, and commercialization capabilities. A roadmap for 5G and a strategy for satellite development will prioritize emerging areas such as nano-satellites and mega satellite constellations.

Expanding Trade Diplomacy and Market Diversification

Trade diplomacy will be effectively used to deepen existing trade agreements and explore new opportunities in emerging markets. The focus will be on increasing exports to neighboring and friendly countries, while expanding into distant markets. Bilateral and multilateral dialogues will be employed to maximize export potential, particularly in Africa, Latin America, and Asia. The Customs Union with the European Union will be updated, with efforts continuing to align Turkish regulations with EU standards. The "Far Countries Strategy" and the "Strategy to Boost Exports with Islamic Countries" will also be implemented to diversify markets and enhance trade relationships.

Promoting Export Financing and Enhancing Service Exports

Promoting access to export financing under favorable conditions will be a priority to enhance the competitiveness and resilience of Turkish exporters, especially those undergoing green and digital transformations. Eximbank will be vital in financing high-tech and value-added exports, ensuring exporters have sufficient financial resources to grow. Turkey will also capitalize on its global potential in services exports, particularly in tourism and transportation, and will aim to position itself as a leader in emerging sectors like health tourism, education, and media production. Efforts to increase tourism revenue, expand into new markets, and promote eco-friendly tourism will be intensified, while enhanced marketing campaigns will expand health tourism services.

Advancing Financial Technology and the Digital Turkish Lira

Financial technology (fintech) development will be prioritized to expand alternative financing options and foster collaboration between traditional financial institutions and fintech companies. The Central Bank of Turkey will continue developing a digital Turkish lira, with insights from the second phase of pilot studies shaping future steps. Cybersecurity measures will also be reinforced to ensure the security of payment systems and electronic money institutions.

Tax Policies for Growth, Fairness, and Efficiency

Tax reforms will be aimed at promoting economic growth and social justice, encouraging investment, employment, production, and exports. Efforts to broaden the tax base and improve voluntary compliance will continue by revising inefficient exemptions and deductions. To improve transparency, tax data and reports will be more comprehensively published. Advanced analysis techniques will be employed to identify risks in specific sectors, leading to preventive measures against tax evasion. Digital platforms will monitor tax compliance more effectively, and third-party data will be utilized for more accurate assessments.

Strengthening Disaster Resilience and Urban Transformation

Efforts to enhance disaster resilience will focus on minimizing the loss of life and property by strengthening community and infrastructure resilience. Urban transformation projects, particularly in high-risk areas like Istanbul, will be prioritized, and investments will be made to restore tourism activities in disaster-affected areas. A comprehensive disaster insurance program will also be expanded.

Improving the Business and Investment Climate

The overarching goal is to improve Turkey's business and investment climate through rule-based, predictable, and transparent public policies that support growth and employment. Efforts will continue to attract high-quality foreign direct investment while channeling domestic and international savings into productive sectors. Bureaucratic procedures will be streamlined, costs reduced, and the digitalization of trade registry processes expanded. Online platforms and one-stop offices will be established to expedite investment procedures, and an inventory of investment sites will help investors choose suitable locations.

Enhancing the Regulatory Framework for Investor Confidence

The regulatory framework will be strengthened to boost investor confidence, predictability, and stability. Judicial processes will be improved, and alternative dispute-resolution mechanisms expanded. Specialized courts, particularly in areas like bankruptcy law and intellectual property rights, will ensure faster outcomes. Legal regulations will be revised to protect existing investments from adverse changes, while a Market Surveillance and Inspection Authority will be established to consolidate oversight activities and eliminate redundancies.

Promoting Competitive Investments in Green and Digital Sectors

Efforts to promote competitive investments will focus on green and digital transformation, along with integrating into global supply chains. Programs designed to boost the capacity of SMEs and increase their participation in global supply chains will be implemented. National cluster initiatives that contribute to competitiveness and sustainability will continue to receive support. The completion of the Industrial Zones Master Plan will facilitate the development of industrial areas connected to key resources, while strategic investments in manufacturing will be expedited through pilot projects aimed at creating industrial reserves for international investors, further positioning Turkey as a leading global investment destination.