Annual & each year imply the same thing making the sentence wordy...eliminate A,B & E...

In C, is what it averages out to is confusing & it has no clear antecedent...it could be growth rate or the economy...

Dead sure it's D.

Look at the "-". The statement after "-" should modify a noun. Now, have a look at the options:

(A) averaging an annual increase each year that is
about eight percent
- No noun to be modified.
(B) with an annual average each year which is about
eight percent
- If we use this statement, then the sentence after "-" modifies Turkey's economy. However Turkey's economy can not be a highest growth rate
(C) eight percent is what it averages out to each year
- Awkward construction.
(D) with an average annual increase of about eight
percent
- Bang on target. This signifies the correct meaning that "avg ann increase (of Turkey)" is highest in world.
(E) the average of the annual increase each year is
about eight percent
- Awkward construction.