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Yes. Türkiye's very high inflation has contributed to the rapid expansion of its nominal GDP in Turkish lira, and this can make its economic performance appear stronger than the underlying reality.
However, there is an important distinction: Türkiye's nominal GDP expressed in US dollars is influenced not only by inflation but also by the exchange rate.
This is particularly important when comparing Türkiye with Indonesia and other emerging economies.
1.
Nominal GDP measures the value of goods and services at current market prices, without adjusting for inflation.
Imagine Türkiye produces exactly the same amount of goods and services in two consecutive years.
| Indicator | Year 1 | Year 2 |
|---|
| Goods produced | 100 units | 100 units |
| Price per unit | 100 lira | 150 lira |
| Nominal GDP | 10,000 lira | 15,000 lira |
| Real GDP growth | — | 0% |
In this example:
- Nominal GDP increases by 50%.
- Actual production does not increase.
- The entire increase comes from inflation.
This is why economists distinguish between nominal GDP growth and real GDP growth.
2.
The relationship becomes more interesting when nominal GDP is converted into US dollars.
The basic formula is:
\[\text{GDP in USD}=\frac{\text{Nominal GDP in TRY}}{\text{TRY per USD}}\]
Suppose Türkiye experiences 50% inflation, but the lira depreciates by only 20% against the US dollar.
Assuming production remains unchanged, its nominal GDP in dollars would increase by approximately 25%.
In other words, Türkiye can report substantial growth in dollar-denominated GDP even without any increase in actual production.
This happens when domestic prices increase faster than the currency depreciates.
Economists sometimes describe the associated exchange-rate movement as real appreciation of the currency.
3.
The IMF's February 2026 assessment provides a revealing comparison.
| Indicator | 2024 | 2025 |
|---|
| Nominal GDP (USD) | $1.36 trillion | $1.58 trillion |
| Nominal GDP growth (lira) | 64.6% | 39.5% |
| Real GDP growth | 3.3% | 4.1% |
| GDP deflator inflation | 59.3% | 34.0% |
Source: IMF 2025 Article IV Consultation, published February 2026.
IMF eLibrary
Notice something important: between 2024 and 2025, Türkiye's nominal GDP in dollars increased approximately 16%, while actual economic output increased only 4.1%.
This does not mean the economy is fictitious or that its growth is entirely inflation-driven. Türkiye has a substantial industrial base, manufacturing capacity, tourism sector and export economy.
But it does demonstrate why nominal GDP growth alone can exaggerate the impression of economic progress.
4.
The IMF's April 2026 World Economic Outlook projected Türkiye's nominal GDP at approximately $1.64 trillion, while its July update projected real GDP growth of just 2.9%.
International Monetary Fund
+1
The OECD subsequently lowered its 2026 real growth forecast to 2.7% in September, while raising its inflation forecast to 31.5%.
Reuters
This reinforces your concern that the country's nominal economic size and its underlying real economic growth tell different stories.
5.
For comparing economic performance, I would examine four indicators together:
- Nominal GDP in USD: International economic size at prevailing exchange rates.
- Real GDP growth: Expansion in actual production.
- GDP at purchasing power parity (PPP): Domestic purchasing power and economic scale adjusted for price-level differences.
- Real GDP per capita: Changes in economic output per person, excluding inflation.
There is one important qualification: Türkiye's nominal GDP in dollars is not an incorrect measurement. It represents the economy's value at prevailing prices and exchange rates. It simply cannot, by itself, establish how much more the country produces or how much better off its population has become.
My conclusion: Your skepticism is economically justified. Türkiye's impressive increase in nominal GDP has been influenced by domestic inflation, exchange-rate dynamics and genuine real growth. Separating these three effects is essential.
And this raises an interesting question for the Türkiye–Indonesia comparison: How much of Türkiye's apparent economic catch-up with Indonesia since 2022 reflects real economic expansion, rather than differences in inflation and currency movements? That would be a particularly useful comparison.
