Monday, 18 July 2016 08:33

Outlook to Turkish Economy

Turkey’s economy has performed remarkably well with its steady growth over the past 14 years. A sound macroeconomic strategy, prudent fiscal policies, and major structural reforms have all contributed to the integration of Turkey’s economy into the globalized world while also transforming the country into one of the major recipients of FDI in its region.

These reforms have increased the role of the private sector in Turkey’s economy, enhanced the efficiency and resiliency of the financial sector, and placed public finance on a more solid foundation. These reforms strengthened the macroeconomic fundamentals of the country, allowing the economy to grow at an annual average real GDP growth rate of 5.6 percent from 2003 to 2016.

Annual Average Real GDP Growth (%) 2003-2016



Source: OECD Quarterly National Accounts, 2017

Turkey’s impressive economic performance over the past 14 years has encouraged experts and international institutions to make confident projections about Turkey’s economic future. For example, according to the OECD, Turkey is expected to be one of the fastest growing economies among OECD members during 2015-2025, with an annual average growth rate of 4.9 percent.

Annual Average Real GDP Growth (%) Forecast in OECD Countries

2015-2025 (USD at 2010 PPP)



Source: OECD


Together with stable economic growth, Turkey has also reined in its public finances; the EU-defined general government nominal debt stock fell to 28.3 percent in 2016 from 72.1 percent in 2002. Turkey has been meeting the “EU’s 60 percent Maastricht criteria” for public debt stock since 2004. Similarly, during 2003-2016, the budget deficit decreased from more than 10 percent to less than 2 percent as a ratio to GDP, which is one of the EU Maastricht criteria for the budget balance.


As the GDP levels increased to USD 857 billion in 2016, up from USD 236 billion in 2002, GDP per capita soared to USD 10,807, up from USD 3,581 in the given period.

The visible improvements in Turkey’s economy have also boosted foreign trade. Exports reached USD 143 billion by the end of 2016, up from USD 36 billion in 2002, while tourism revenues, which were around USD 12.4 billion in 2002, exceeded USD 22 billion in 2016.

Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy. It is the 17th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures in 2016.

  • Institutionalized economy fueled by USD 180 billion of FDI in the past 14 years
  • 17th largest economy in the world and 6th largest economy compared with EU countries in 2016 (GDP, IMF)
  • Robust economic growth with an annual average real GDP growth of 5.6 percent during 2003-2016
  • GDP reached USD 857 billion in 2016, up from USD 236 billion in 2002
  • Sound economic policies with prudent fiscal discipline
  • Strong financial structure that is resilient to global financial crises
Published in Latest News
Monday, 18 July 2016 08:33

Turkish Real Estate Market

Turkey is one of the most promising real estate markets in Europe, and the mantra “location, location, location” rings especially true for this country. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 81 million people, Turkey offers great opportunities for real estate developers and investors by combining a large construction sector with growing commercial and industrial output.


Some key facts and figures in the Turkish real estate sector include:


  • The real estate sector accounted for approximately 8.4 percent of GDP in the last decade. On the investment side, FDI inflows stood at USD 10.8 billion, with real estate and construction garnering USD 4.6 billion (42.9 percent) of total FDI in 2017.
  • Urban renewal and mega projects dominate the agenda for the foreseeable future, particularly in Istanbul. Some projects in the city include Marmaray, Canal Istanbul, Yavuz Sultan Selim Bridge, Eurasia Tunnel, 3-Storey Grand Istanbul Tunnel, and Istanbul’s 3rd airport.
  • The Urban Renewal and Development initiative will encompass 7.5 million housing units. The initiative has a budget of USD 400 billion, with a large contribution coming from the private sector.
  • According to the Knight Frank Global House Price Index, Turkey ranked 6th in the 56-location index in Q3 of 2017 in terms of the annual price growth index. Turkey saw a year-on-year increase of 11.1 percent, and thus emerged as one of the top-performing housing markets in the world, ahead of Australia, Latvia, and India.
  • The total number of houses sold in the Turkish property market reached 1.4 million units in 2017; likewise, sales of real estate to foreigners began to increase following the abolishment of the reciprocity law in 2012. In 2017, 22,234 houses were sold to foreigners in Turkey, marking a year-on-year increase of 22.2 percent. Regarding house sales to foreigners, Istanbul was the top-performing province with 8,182 sales in 2017, followed by Antalya with 4,707 sales, Bursa with 1,474 sales, and Yalova with 1,079 sales.
  • As of 2017 year-end, the existing Grade A office stock in Istanbul surpassed 5.3 million square meters across 249 office buildings. Annual gross leasable area growth in the office market was around 12 percent on average between 2010 and 2017. There is more than 1.2 million square meters of office supply under construction, and it is expected that the total grade A office supply will reach almost 7.1 million square meters gross leasable area by the end of 2020.
  • 401 shopping centers are operational in Turkey with a total gross leasable area of 12.2 million square meters. 114 shopping centers in Istanbul with a total gross leasable area of 4.2 million square meters represent 34 percent of the total leasable shopping center area in Turkey.
  • According to JLL’s Cross Border Retailer Attractiveness Index 2016, Istanbul is the 6th most attractive market in Europe after London, Paris, Moscow, Milan, and Madrid.
  • In spite of the growth in recent years, Turkey is still below the average of total leasable area per person compared to the European average. This indicates potential for further retail growth in Turkey.
  • According to the Ministry of Culture and Tourism Directorate, Turkey has 3,641 graded hotels with a total of 426,981 rooms as of 2016 year-end. 5-star hotels account for 42.7 percent of hotel stock, while 4-star hotels secure a 24.8 percent share, and the 3-star segment makes up 12.6 percent of the market share.
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  • Booming economy; more than tripling its GDP, reaching USD 851 billion in 2017, up from USD 231 billion in 2002 (TurkStat)

  • Stable economic growth with an average annual real GDP growth rate of 5.8 percent between 2002 and 2017 (TurkStat)

  • Promising economy with a bright future as it is expected to become one of the fastest growing economies among the OECD members during 2018-2019 with an average annual real GDP growth rate of 5.0 percent (OECD)

  • 13th largest economy in the world and 5th largest economy compared with the EU in 2017 (GDP at PPP, IMF WEO)

  • Institutionalized economy fueled by USD 193 billion of FDI in the last 15 years (CBRT)

  • A dynamic and mature private sector with USD 157 billion worth of exports and an increase of 335 percent between 2002 and 2017 (TurkStat)


  • A population of 81 million (2017, TurkStat)

  • Largest youth population compared with the EU (Eurostat)

  • Half the population under the age of 31.7 (2017, TurkStat)

  • Young, dynamic, well-educated and multi-cultural population


  • Over 30.5 million young, well-educated and motivated professionals (2016, TurkStat)

  • Increasing labor productivity

  • Approximately 800,000 students graduate annually from over 183 universities (2016, CoHE)

  • More than 950,000 high school graduates with around half from vocational and technical high schools (2016, Ministry of National Education)


  • The 2nd biggest reformer among OECD countries in terms of its restrictions on FDI since 1997 (OECD FDI Regulatory Restrictiveness Index 1997-2017)

  • Business-friendly environment with an average of 6.5 days to set up a company (World Bank Doing Business Report 2018)

  • Highly competitive investment conditions

  • Strong industrial and service culture

  • Equal treatment for all investors

  • Around 58,400 companies with international capital in 2017 (Ministry of Economy)

  • International arbitration

  • Guarantee of transfers


  • New and highly-developed technological infrastructure in transportation, telecommunications and energy

  • Well-developed and low-cost sea transport facilities

  • Railway transport advantage to Central and Eastern Europe

  • Well-established transportation routes and direct delivery mechanism to most of the EU countries


  • A natural bridge between both East-West and North-South axes, thus creating an efficient and cost-effective outlet to major markets

  • Easy access to 1.7 billion customers in Europe, Eurasia, the Middle East and North Africa

  • Access to multiple markets worth USD 25 trillion of GDP


  • An important energy terminal and corridor in Europe connecting the East and the West
  • Located at a close proximity of more than 70 percent of the world’s proven primary energy reserves, while the largest energy consumer, which is Europe, is located right to the west of Turkey, thus making the country a linchpin in energy transit and an energy terminal in the region


  • Corporate Income Tax reduced from 33 percent to 20 percent (22 percent for 2018, 2019 and 2020)

  • Tax benefits and incentives in Technology Development Zones, Industrial Zones and Free Zones, including total or partial exemption from Corporate Income Tax, a grant on employer’s social security share, as well as land allocation

  • R&D and Innovation Support Law

  • Incentives for strategic investments, large-scale investments and regional investments


  • Customs Union with the EU since 1996 and Free Trade Agreements (FTA) with 21 countries (Ministry of Trade)

  • More FTAs underway

  • Accession negotiations with the EU


  • 69 million broadband internet subscribers in 2017, up from 0.1 million in 2002 (ICTA, TurkStat)

  • 78 million mobile phone subscribers in 2017, up from 23 million in 2002 (TurkStat)

  • 62.5 million credit card users in 2017, up from 16 million in 2002 (The Interbank Card Center of Turkey)

  • 193 million airline passengers in 2017, up from 33 million in 2002 (TurkStat)

  • 38 million international tourist arrivals in 2017, up from 13 million in 2002 (TurkStat) 


Published in Latest News
Monday, 18 July 2016 08:31

Now Turkey! Right Time, Right Place

“As a booming country with a GDP growing at an average annual rate of 6 percent over the period of 2002 to 2017, Turkey represents tremendous potential with numerous investment opportunities for foreign investors. Experts agree that this trend will continue into the future as the country vigorously pursues its goal of becoming one of the top 10 economies in the world over the next 5 years.”


Right time, right place!


Turkey is a country that has experienced strong structural changes over the last decade. This factor has guided the country into a phase that numerous experts have characterized as a transformation process. And, as with all deep revolutionary reforms, new opportunities arise.


With a strong regional position, Turkey is playing an increasingly important role in its surrounding area and beyond. Turkey is an active member of G-20, and is also a member of the North Atlantic Treaty Organization (NATO), the Council of Europe (COE), and the Organization of Islamic Cooperation (OIC).


Turkey’s status also changed once it became an official EU candidate country in October 2005. This has given a new strategic goal to the country, unifying a number of vectors towards a single direction: the Copenhagen political and Maastricht economic criteria. The structural reform process launched in 2003 has generated a new, dynamic and much more internationally-integrated Turkey.


As a booming country with a GDP growing at an average annual rate of 6 percent for more than a decade, Turkey is the land of opportunities. Over the past decade, the GDP has more than tripled in current US dollar terms, reaching USD 851 billion in 2017. Such an impressive economic growth made Turkey an industrial powerhouse in its region. Turkey is the largest light commercial vehicle producer in Europe and the 14thlargest automotive manufacturer in the world. Similarly, Turkey is the 2nd largest steel manufacturer as compared with the 28 EU and 8th largest in the world. Today Turkey offers highly lucrative investment opportunities in a variety of sectors, such as automotive, machinery, mining, energy, renewable energy, defense and aerospace, real estate, finance, ICT, agriculture, chemicals, petrochemicals, iron and steel, and so on.


The economic power of Turkey has drastically increased in the past decade. Turkey became the 13th largest economy in the world, and the 5th largest compared to the 28 EU countries in terms of GDP at purchasing power parity in 2016. The country’s strong economic performance over the past decade has encouraged investors to make confident projections about the future of the Turkish economy.


Throughout the last decade, Turkey has been implementing an active policy to improve its investment environment. To start with, the FDI frame law, which was passed by the Parliament in 2003, is the first installment of these significant economic reforms to change the investment environment in Turkey and make it attractive to global investors. This law guaranteed equal treatment to all investors without differentiating between local and international investors and enabled all international investors to enter Turkey without a preliminary authorization request, to transfer dividends freely, to access real estate, to be protected against expropriation, and to hire expatriates, etc. Turkey also decreased corporate tax from 33 percent to 20 percent for all companies. Important parameters, such as the acceptance of the international arbitration courts and the ongoing harmonization of laws with EU legislation have made Turkey one of the most liberal countries in the world, both in terms of the legal framework for FDI and the investment environment.


The sum of all the joint efforts has led Turkey to a very impressive economic output. Put differently, in a very short period of time, the FDI received by Turkey has benefited from these deep structural reforms. While Turkey attracted approximately USD 1 billion of FDI per year on average between 1992 and 2002, it has been attracting an average annual FDI of more than USD 12.8 billion since 2003.


In the light of developments, it is certain that the Turkey of today is very different from the Turkey of 10 years ago. Similarly, the Turkey of 2023, a Turkey celebrating the centennial foundation of the republic, will also be strikingly different from today. With ambitious targets set by the current government, the Turkey of 2023 is expected to be a more prosperous and added-value generating member of the international community with a vital contributing role to global peace and welfare. Active on a global scale, Turkey is also offering investors a platform to benefit from emerging opportunities in other countries, particularly in the surrounding region. Turkey’s strategic location allows investors to access a potential market of 1.6 billion people, a combined GDP of USD 25 trillion and foreign trade of USD 8 trillion.


Turkey, with an improved and investor-friendly business environment, achieved considerable success in both domestic and foreign investments over the decade, not only raised the bar a notch, but is now also on track to realize its real and deserved potential; to be home to investments that will contribute to new jobs, new technologies and new visions.


Certainly, the right place to be at the right time…

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