Research and analysis

Turkey: latest killer facts about the economy

Published 29 September 2014

0.1 Detail

• Turkey is the world’s 16th and Europe’s 6th largest economy. According to HSBC’s “The World in 2050” report, Turkey will be the world’s 12th and Europe’s 5th biggest Economy by 2050. In September 2010, the FTSE Group promoted Turkey from ‘secondary emerging’ status to ‘advanced emerging’ status.

• Turkey is currently the fastest emerging market of Europe and OECD. Turkish GDP grew by 8.8% in 2011, 2.2% in 2012 and 4% in 2013. The average growth rate in the last decade was 5%, the fastest among the OECD countries, which grew at an average of 1.7%. OECD estimates that Turkey will be the third highest growing country after China and India by 2017 and will surpass India after 2017 to become number two.

• Turkey’s GDP (current prices) for the year 2013 was $827bn, which rose from $231bn in 2002. GDP per capita nearly tripled since 2002, from $3,500 to $10,815 in 2013. Turkey’s GDP per capita is greater than that of two EU countries, Romania and Bulgaria.

• Turkey is one of the world’s biggest markets with a population of 76 million and a labour force of 28 million. Half of the population is below the age of 30. Turkey has the highest youth population and 4th largest labour force compared to EU-27 countries.

• Jim O’neill, former chief economist at Goldman Sachs and creator of the term BRIC, has come up with a new acronym, MINT – (Mexico, Indonesia, Nigeria, Turkey) The favourable demographics and the economic prospects of these countries will lead them to be in the top ten countries of the world in the next 20 years.

• Within 4 hours of flying distance, Turkey has access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa and to markets with a total $25 trillion GDP.

• Istanbul and Ankara are among the biggest cities in the world in terms of GDP. At $180 billion, Istanbul’s GDP surpasses that of many EU countries such as Romania, Hungary, Bulgaria and Slovenia. Istanbul is also the second biggest city of Europe after Moscow with 13.7 million inhabitants.

• Turkey’s net debt to GDP ratio in 2012 is 36% in 2012, which is well below the Maastricht Criterion of 60%. Turkey has been meeting the Maastricht Criterion on public debt since 2004. Similarly, Turkey’s budget deficit/GDP ratio in 2012 is 2%, one of the lowest rates in Europe.

• In late 2012, Turkey’s sovereign credit rating was raised to “investment grade” by Fitch Ratings. In March 2013, Standard & Poor’s raised Turkey’s sovereign credit rating to (BB-), one level below investment grade. It was followed by Moody’s which raised Turkey’s rating to investment level in May 2013.

• There are currently 145,000 Turkish entrepreneurs operating in Europe, employing 627,000 people and running €63 billion worth of businesses.

• There are 32,000 foreign capital enterprises operating in Turkey.

• According to the Forbes list of World’s Billionaires 2014, there are 43 billionaires in Turkey, 37 of which reside in Istanbul.

• Starting a business in Turkey takes an average of 6 days, compared to the world average of 30.6 days, MENA average of 23 days and OECD average of 12 days.

• Over the last 10 years, Turkey attracted more than $100 billion of FDI and ranked as the 13th most attractive FDI destination in 2012.

• 78% of Turkey’s overall FDI comes from the EU. Turkey has become an investment base for European businesses with increasing integration into the EU’s supply and production chain.

• Turkey has significantly liberalised its FDI regime. According to the OECD’s Regulatory Restrictiveness Index, Turkey is less restrictive than the OECD average and far less restrictive than the non-OECD average (ranked 27th out of 58 countries in 2013).

• Turkey’s export volume was $152bn in 2013, more than quadrupling since 2002.

• Turkey’s major export partners in 2013 were Germany (9%), Iraq (8%) and the UK (5.8%), while major import partners were Russia (10%), Germany (9.6%), China (9.8%) and USA (5%). UK is Turkey’s 8th biggest trade partner with 3.7% market share in its overall trade.

• Turkey has been in the Customs Union with EU-27 countries since 1995. It has free trade agreements with 19 other countries, in FTA negotiations with 21 countries and 5 country groups.

• According to Ernst & Young’s M&A (mergers and acquisitions) Barometer report, Turkey’s M&A market had the highest transaction number and volume (297 transactions with $18 billion investment) in 2012 in the Central and South Eastern Europe Region.

• According to the World Economic Forum’s Global Competitiveness Report for 2012-2013, Turkey moved up 16 places in the global competitiveness rankings last year reaching 43th place among 144 economies and becoming the most competitive country in south-eastern Europe.

• 33% of big multinational companies use their offices in Turkey as their regional headquarters. Companies that use Turkey as a regional management hub include Benetton, Bosch, BP, Citibank, Coca-Cola, General Electric, GlaxoSmithKline, Hewlett-Packard, Hyundai, Imperial Tobacco, Intel, LG, Mercedes-Benz, Microsoft, Pepsi, Procter Gamble, Samsung, Siemens and Unilever.

• Turkish banking sector is one of them most robust among Europe. Banking sector’s assets size is $800bn by June 2013, higher than the GDP of many EU countries; has one of the highest capital adequacy ratios (16% compared to the minimum requirement of 8%) and lowest non-performing loan ratios (3%) in Europe. There are 49 banks in Turkey, 32 of them deposit banks, 16 of them foreign.

• Turkey is one of the fastest growing energy markets in the world. The demand for electricity in the country is estimated to grow at an annual 6% between 2009 and 2023. The total amount of investments to be made to meet the energy demand in Turkey over the next 10 years is estimated around USD 130 billion.

• Turkey is also playing an increasingly important role in the transit of oil and gas supplies. The Baku-Tbilisi-Ceyhan pipeline, the second longest oil pipeline in the world, delivers crude oil from the Caspian Sea to Turkey’s Mediterranean coast, from where it is distributed to the world’s markets. The Blue Stream, a major trans-Black Sea gas pipeline, delivers natural gas from Russia to Turkey. There are 2 other major pipelines (TANAP and South Stream) waiting to be completed which will transmit oil and gas from the Caspian region, Russia and the Middle East routed westward to Europe.

• The renewable energy sector has been injected with billions of dollars in recent years by leading Turkish banks and is expected to grow further. Turkey ranks 1st in the world in terms of growth rate in wind energy plants and only 15% of its potential has been utilized up until now. Turkey aims to increase the ratio of its renewable energy resources to 30% of its total energy production by 2023 from the current 20%.

• Turkey’s tourism sector is one of the biggest in the world. More than 32 million foreign tourists visited Turkey in 2012 bringing in $24 billion revenue. In 2012, both Turkey was the 6th most visited country in the world. Istanbul is the 6th most visited city in the world and 3rd mostly visited city of Europe, after London and Paris.

• UK is among the top three sources of tourists to Turkey with over 2.4 million visitors last year. 32,000 Britons own property in Turkey.

• Turkey is the 8th largest textile and 7th largest clothing exporter in the world by 2011. UK is Turkey’s 2nd largest clothing and 6th largest textile and shoe export market. Turkish companies manufacture the garments of many world renowned retailers, including Adidas, Esprit, Tommy Hilfiger, Gap, Marks & Spencer, Next, Burberry, Banana Republic, H&M and Diesel. Turkey is also the 3rd biggest producer of footwear in Europe. (Tr ayyak sanay der bsk cetin)

• According to the leading international industry magazine “ENR Engineering News Record”, with 33 companies among the top 225 contracting companies, Turkey ranked as the second country in the world in 2012 after China. Turkish contractors are very active in especially MENA, Central Asia and Sun-Sahara Africa. Since 1970, Turkish contractors have completed about 6.500 projects in 93 countries with $205 billion project value. The construction sector in Turkey is expected to be among the highest growing in the world with an expected growth rate of 8.5% between 2009 and 2014.

• Turkey has huge growth potential in the real estate sector. According to the 2012 publication of “Emerging Trends in Real Estate Europe”, prepared by PwC and ULI, Istanbul is the most attractive investment market in Europe in the “Existing Property Performance”, “New Property Acquisitions”, and “Development Prospects” categories. Ernst and Young rates Turkey as the second most attractive market in Europe for real estate investors.

• Turkey is the largest commercial vehicle and second largest bus manufacturer of Europe and the 16th biggest motor vehicle producer of the world. In 2012, 1.1 million vehicles were produced in Turkey, 66% of which were exported. Today, there are 17 companies including Fiat, Honda, Hyundai, Renault and Toyota, Mercedes-Benz and M.A.N manufacturing various types of vehicles in Turkey. Turkey also provides autoparts for brands such as GM, Mercedes, BMW, Opel, Toyota, Fiat and Ford. (OSD)(MoI)

• Turkey has risen to become Europe’s largest home appliances manufacturer. Turkey’s largest white goods export market is Europe which is led by the UK, France and Germany. Turkish brand Beko is currently the leading white goods brand in the UK, becoming the number one selling brand in refrigeration, freezers, and washing machines and cooking devices.

• Turkey is the number one TV manufacturer in Europe. Turkey’s Vestel and Beko account for over half of all TV sets manufactured in Europe.

• The Turkish ICT sector is a fast growing sector with an annual growth rate of 14% between 2005 and 2010. According to Business Monitor International predictions, Turkey will be the highest growing IT market in the period between 2009 and 2014.

• Supported by a young and tech-savvy population and over 20 million internet users, Turkey’s e-commerce market is set to grow exponentially. The $17 billion e-commerce volume registered in 2012 is expected to rise at an annual rate of 123% over the next 3 years to reach $140 billion.

• Of some 68 million mobile phones registered in the country, 58%feature the 3G technology – almost twice as many as on European average. By 2014, the mobile phone penetration is expected to reach 113%. With an average airtime of 299 minutes per month, Turks are the most avid mobile phone users in all of Europe.

• Turkey is one of the leading countries in the world in agriculture and related industries. Turkey is the world’s 7th largest producer of fruits and vegetables, Europe’s largest and the world’s 3rd largest frozen fruit exporter and has the largest milk and dairy production in its region.

• Turkey is Europe’s 2nd largest iron and steel maker and the world’s leading producer of construction iron.

• Turkey is the world’s 4th largest mega-yacht manufacturer and 5th largest shipbuilding country.

• Turkey has the second largest army in NATO, after USA.

0.2 Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.