Turkey faces risk of early deindustrialization

Turkey is facing a risk of ‘early deindustrialization’ as high inflation, interest rates, and a strong lira impact the manufacturing sector. Economic data indicates a significant shift in the country's economic structure, with the economy moving toward service sectors such as finance, accommodation, health, and transport.

According to data from the Turkish Statistical Institute (TÜİK), the manufacturing sector's share of the national income (GDP) has declined from 22.12% to 15.58% over the last five years. Similarly, the total industrial sector's share of GDP fell from 25.84% in 2021 to 18.47% by the end of 2025. In contrast, the services sector's share of GDP rose to 60.94% in the second quarter of 2026, surpassing the 60% threshold for the first time.