Turkey attractiveness survey 2013
In recent years, Turkey has overcome a series of political and economic challenges and is now enjoying a period of stable and solid economic growth.
The country still has great untapped potential, with its economy set to grow at least 5% each year in the medium term.
Turkey’s world-class features include its strategic location at the crossroads of Europe, Asia and the Middle East and the size of its domestic market. These strengths are attracting a number of investors, who remain confident about Turkey’s future.
Indeed, over half of respondents to the survey are considering establishing or developing additional activities in Turkey over the next year.
Historically, Turkey has been reliant on the developed economies for a significant portion of its trade and investment.
"Turkey stands out as a promising emerging market alongside Brazil, Russia, India and China."
Zafer Çağlayan, Minister of Economy, Republic of Turkey
However, Turkey is now looking to do more business with other parts of the world, including the Middle East, Africa and Asia.
This shift in focus and capital flow will accelerate the investment and growth of Turkey. Important sectors for FDI span across manufacturing and services.
Istanbul is the most preferred destination for investors in Turkey. Nevertheless, the Government has an opportunity to balance regional development by replicating similar growth in other cities and provinces.
We can expect Turkey’s new investment incentive scheme and continued reform program to boost investors’ confidence in the country further, and quicken its development into a regional and global hub for operations.
However, there are some key challenges to overcome. Turkey’s proximity to the political instability in neighboring countries, an ongoing account deficit, as well as the need to accelerate its innovation and R&D capabilities are all seen as factors that limit the country’s attractiveness for FDI.
Turkey in the global context: the next European powerhouse
Turkey lies at the junction of Europe, Asia and the Middle East. This strategic geographical location, combined with massive domestic market and stable macroeconomic policy has enabled it to become the 18th largest economy in the world in terms of GDP.
Turkey offers one of the highest risk-reward ratios to foreign investors and is now recognized as an economy with very high potential.
The country is expected to grow at 3.5% in 2013. Its growth path also appears to be sustainable, and annual GDP growth should exceed 5% in the medium term.
Beyond the BRICs: polishing the next rough diamond
The world has realized that the concept of emerging markets is not limited to the four large BRIC economies — Brazil, Russia, India and China. Turkey, along with others such as Indonesia, Vietnam and Mexico, has all the fundamental economic characteristics to lead the next wave of rapid-growth markets.
Turkey’s main competitor for FDI is China, followed by Russia, Brazil and India. The BRICs remain a safe option in which to invest, but the momentum is shifting to other high-growth markets.