Its diversified economy, proximity to Europe, Middle East, North Africa and Eurasia, integration with European markets, a young and vibrant work force, crisis experienced businessmen and economy management make Turkey one of the most powerful economies in the region. The main economic indicators are given below:
| 2007 |
2008 | |
| GDP (billion $ / in current prices) | 656.6 | 741.8 |
| GDP Growth Rate (%) | 4.5 | 1.1 |
| GDP per Capita (Nom.$) | 9,333 | 10.436 |
| FDI Inflow (billion $) | 19.1 | 14.4 |
| FDI Outflow (billion $) | -743 | -35 |
| Unemployment (%) | 9.9 | 10.3 |
| Consumer Price Inflation (%) | 8.61 | 10.54 |
| Export (billion $) | 107.2 | 132.0 |
| Import (billion $) | 170.0 | 201.8 |
| External Debt (billion $) | 247.1 | 284.4 |
Source: TUIK, Central Bank of Turkey
Being the commercial center of southeastern Europe, Middle East and Eurasia, Turkey is becoming an increasingly important economic and diplomatic country in the region. Between 2001 and 2007, Turkey’s GDP have increased by 242% totaling to USD 656.6 billion and she became the 15th largest economy in the world.
| 2009 | 2010 | |
| GDP (billion $ / nominal) | 657.626 | 752.996 |
| GDP Growth Rate (%) | 0.4 | 1.9 |
| GDP per Capita ($) | 13,174 | 13,446 |
| Export (billion $) | 116.860 | 122.764 |
| Import (billion $) | 151.811 | 161.265 |
Source: The Economist Intelligence Unit Forecasts, Jan. 2009
The Turkish economy has grown steadily over the last 27 quarters with an average rate of 7%. This growth is expected to continue in coming years with a lower rate due to the global financial crisis. After the 2001 financial crisis, Turkey made important structural reforms which have led to improve her financial system. Therefore, Turkey is relatively less affected by the global crisis. Although nowadays Turkey has to deal with debts which mostly belong to private companies, effects of the global financial crisis to Turkey are not going to be an internal one on the most part, but it is going be an external one as less demand for exports. Also previous crisis experience of Turkish businessmen and economy officials make Turkey more resilient to the global financial crisis today.
Between 2001 and 2007, foreign trade has increased by 281% and exports have increased by 242% as well and reached USD 107 billion in 2007. In 2008, the foreign trade accounted for 333.8 billion USD. Automotive and iron and steel are the major export items, while oil and natural gas are major import items.
In 2008, Turkey mainly exported to Germany, the United Kingdom, the United Arab Emirates, Italy and France whereas she mainly imported from Russia, Germany, China, the United States and Italy.
| 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |
| Export ($) | 36,059,089 | 47,252,836 | 63,167,153 | 73,476,408 | 85,534,676 | 107,271,750 | 132,002,612 |
| Import ($) | 51,553,797 | 69,339,692 | 97,539,766 | 116,774,151 | 139,576,174 | 170,062,715 | 201,822,882 |
| Volume ($) | 87,612,886 | 116,592,528 | 160,706,919 | 190,250,559 | 225,110,850 | 277,334,464 | 333,825,494 |
| Balance ($) | -15,494,708 | -22,086,856 | -34,372,613 | -43,297,743 | -54,041,498 | -62,790,965 | -69,820,270 |
Source: TUIK
| Main Exports of Turkey | ($-2008) | Main Imports | ($-2008) | |
| Vehicles other than railway | 18,299,890 | Mineral fuels and oils |
48,207,184 | |
| Iron and steel | 14,948,504 | Iron and steel |
23,157,625 | |
| Machineries, mechanical appliances, boilers and parts thereof | 10,260,093 | Machineries, mechanical appliances, boilers and parts thereof |
22,515,382 | |
| Electrical machinery and equipment | 8,003,852 | Electrical machinery and equipment |
13,868,030 | |
| Articles of apparel and clothing accessories knitted | 7,832,879 | Vehicles other than railway | 12,790,092 | |
| Mineral fuels and oils | 7,531,482 | Plastics and articles thereof, |
9,385,397 | |
| Articles of iron and steel | 5,746,210 | Pearls, precious stones, coin |
5,653,770 | |
| Pearls, precious stones, coin | 5,384,155 | Organic chemicals |
4,421,328 | |
| Articles of apparel and clothing acc.not knitted | 5,326,310 | Pharmaceutical products |
4,360,040 | |
| Plastics and articles thereof, | 3,562,395 | Optical instruments and apparatus |
3,442,138 | |
| Fruit | 2,854,331 | Copper and articles thereof |
3,275,912 | |
| Ships, boats and floating structures | 2,647,845 | Paper and paperboard |
2,604,034 | |
| Salt, sulfide, earth, plastering mat., lime, cement | 2,280,427 | Aluminium and articles thereof |
2,539,440 | |
| Other made-up textile articles | 2,097,914 | Cotton. cotton yarn and cotton fabric |
2,330,337 | |
| Furniture | 1,890,115 | Articles of iron and steel |
2,227,035 | |
| Rubber and articles thereof | 1,807,689 | Rubber and articles thereof |
2,219,352 | |
| Aluminium and articles thereof | 1,775,810 | Cereals |
2,137,315 | |
| Cotton. cotton yarn and cotton fabric | 1,632,015 | Miscellaneous chemical products |
1,732,506 | |
| Preparations of vegetables and fruits | 1,440,495 | Man-made staple fibers | 1,695,433 | |
| Man-made filaments | 1,336,688 | Inorganic chemicals |
1,684,512 | |
| Total Export | 132,002,612 | Total Import | 201,822,882 |
Source: TÜIK
| Principal Destinations of Exports |
($-2008) | Principal Origins of Import | ($-2008) | |
| Germany |
12,958,895 | Russia Fed. |
31,317,596 | |
| United Kingdom |
8,168,650 | Germany |
18,682,114 | |
| U.A.E |
7,981,284 | China |
15,642,623 | |
| Italy |
7,816,821 | U.S.A |
11,971,409 | |
| France |
6,622,261 | Italy |
11,008,455 | |
| Russia Fed. |
6,481,663 | France | 9,021,719 | |
| U.S.A |
4,290,146 | Iran | 8,199,594 | |
| Spain |
4,051,264 | Ukraine | 6,106,808 | |
| Romania |
3,981,895 | Switzerland | 5,588,284 | |
| Iraq | 3,912,191 | United Kingdom | 5,323,540 | |
| Netherlands |
3,143,422 | Spain | 4,546,842 | |
| Switzerland |
2,857,127 | South Korea | 4,089,879 | |
| Greece |
2,430,549 | Japan | 4,021,871 | |
| Saudi Arabia |
2,197,152 | Romania | 3,546,851 | |
| Ukraine |
2,184,289 | Saudi Arabia | 3,322,455 | |
| Bulgaria |
2,149,395 | Algeria | 3,262,176 | |
| Belgium |
2,122,550 | Belgium | 3,148,361 | |
| Iran |
2,028,452 | Netherlands | 3,048,262 | |
| Israel |
1,935,244 | India | 2,457,525 | |
| Azerbaijan |
1,666,091 | Kazakhstan | 2,331,992 |
Source: TUIK
Foreign investors find Turkey attractive for a number of reasons:
a) The Government maintains a liberal policy towards all forms of foreign investmentg) There are several privatization projects under progress
In the last six years in particular, Turkey has started to draw increasing amounts of foreign capital thanks to a rapid recovery from the 2001 crisis, large privatization projects, and prolonged stability coinciding with the excessive liquidity in international markets. Last year, according to the United Nations Conference on Trade and Development (UNCTAD), Turkey ranked 23rd in the world and 9th among the emerging markets in terms of attractiveness as an FDI destination. Turkey also ranked 59th out of 181 economies in Ease of Doing Business Rank of the World Bank, 41st out of 121 economies in Forbes Doing Business Index and 15th most attractive economy for the location of FDI in UNCTAD´s World Investment Prospects Survey 2008-2010.
Being the world’s 15th economy and Europe’s 6th economy, Turkey has recently been home to numerous significant investments by attracting more than 50 billion USD for the last 3 years.
In 2003 when the new investment law was ratified, there were about 6,500 foreign companies operating in Turkey, whereas as of 2007 there are more than 18,300 foreign companies operating in Turkey. Despite the global crisis, the amount of FDI is 14.5 billion USD for 2008 with only a slight decrease.
| Sectors 2008 |
|
| Agriculture, Hunting, Forestry and Aquaculture | 44 |
| Mining | 168 |
| Manufacturing Industry | 3,734 |
| Food, Beverage and Tobacco | 1,278 |
| Textile | 189 |
| Chemicals | 121 |
| Machinery | 219 |
| Automotive | 67 |
| Other | 1,860 |
| Electricity, Gas, Water | 1,034 |
| Construction | 887 |
| Wholesale and Retail | 2,059 |
| Hotels and Restaurants | 27 |
| Transportation, Telecommunications and Logistics | 169 |
| Financial Intermediary Institutions | 5,456 |
| Real Estate | 656 |
| Other Social and Personal Services | 208 |
| Total 14,442 | 14,442 |
Source: Central Bank of Turkey
The cumulative sector breakdown of foreign capital financed companies between 1957-2007 shows that 30% of these companies operate in wholesale and retail sector; 19% of them operate in manufacturing sector and 15% of them operate in real estate, renting and business activities. Construction (9%); transport, storage and communications (9%); hotels and restaurants (7%); other community, social and personal service activities (6%); mining and quarrying activities (2%); agriculture, hunting, fishing and forestry (2%) and electricity, gas and water supply (1%) constitute other sectors.
| 2000 |
1.029 |
| 2001 |
604 |
| 2002 |
283 |
| 2003 |
505 |
| 2004 |
815 |
| 2005 |
1.065 |
| 2006 |
1.677 |
| 2007 |
2.275 |
| 2008 |
2.604 |
| 2003-2008 |
8.922 |
| 1991-2008 |
12.635 |
Source: Central Bank of Turkey
The Turkish companies have become important investors abroad and have recently accomplished significant projects and have bought world’s leading brands including Godiva, Razi, Trader Media East and Grundig. Moreover, the Turkish contractors have recently undertaken projects accounting for 135 billion USD as of end of 2008. Accordingly, 23 Turkish contracting firms partake among the world’s largest 225 contracting firms ranking.
The Turkish companies have invested in the sectors of banking, white goods and telecommunication in the Eastern Europe, energy, consumer goods, industry, tourism, finance and logistics in the Eurasia, chemicals, industry and logistics in the Gulf countries and food, textile and automotive in the Middle East.
For more information on Merger and Acquisitions please refer to Deloitte’s “Annual Turkish M&A Review 2008” and “Private Equity Confidence Survey 2009 – first half year” (www.deloitte.com.tr)