Throughout the 1990s, the Turkish economy was characterized by periods of growth marred by runaway hyperinflation, including financial crises in 1994 and 1997 in which inflation soared and banks failed.
Two earthquakes in 1999 further devastated the economy. There were political elements to the economic troubles as well with coalition governments disagreeing over policies. In 1999, inflation was recorded at 75% and the currency constantly devalueing agains the U.S.Dollar to reach TL 1.7m to 1 U.S.Dollar.
Since the advent of a single party government 2002 however the economy has stabilized. The currency was reformed in 2003 when six zeros were removed from the Lira. The exchange rate now stands at arount TL1.5 to the U.S.Dollar.
Since the introduction of the TL, Turkey’s inflation rate has been in the single digits, well within the range of normality. The currency and economic reforms have had positive consiquences for the real-estate sector as well with increased foreign direct investment, particularly in the residential and commercial sectors.
Rental and capital values have increased considerably but are still well below European standards