Country Analysis: Turkey

Introduction

• Undeterred by the global crisis in the year 2009,

the Turkish economy has been expected to
experience robust growth in the coming future.

• Turkey with its unique location bridges East and

West both culturally as well as geographically
(BBC, 2018).

• It is one of the members of the OSCE, UN,

NATO, ECO, and the BSEC
Country Background

• The population of Turkey is very young, with almost 50% of the population
is under the age of twenty-five years.

• The current GDP is US$ 750 million with a population of around 80.3 million (The
World Bank, 2018)0

• The Turkish economy has also attained a spectacular performance along with sturdy
growth over the last fifteen years.
PEST Analysis

 A strong promoter of liberal trade as well as the investment policies

• Political  Recent governments remarks sustained commitment to improve

economic policies (World Trade Organization, 2016).
 The nation witnessed intermittent violent terrorist acts

 Healthy flow of FDI boosts its economic development

• Economic
 Turkish labour market is comparatively rigid to the global standards.
 ….Contd.

 High unemployment levels

 Lack of appropriate educational system (Hurriyet, 2017)
• Social
 Increase in percentage of young population
 Opportunity to increase the employment rate by capitalizing on young labour force

 Substantial progress in the ICT sector (Deloitte, 2015)

 Government of Turkey taking initiative to improve R&D
• Technological
 Growth in the number of skilled scientists
 Considerable reassurance provided by the government to the foreign entities in order to
raise the culture of innovation
Competitive Advantage of Turkey

• Turkey GDP growth is approximately 1.80% only

(Trading Economics, 2018).

• Turkey is categorized as a developing market

economy.

• One of the biggest producer of textiles; agricultural

products; ships, motor vehicles, and other
(Source: Trading Economics,
2018) transportation equipment
 … Contd.

• Turkey is an industrial nation and has contributed towards

the development of a number of industries in the field of
tourism and transportation

• Turkey is enthused towards improving the standard of living

of its population by means of improving its education
system
Foreign currency and exchange influence

 Quality of exchange rate policies becomes a critical issue

 Acceleration of the capital inflow result in exchange rate instability and

overvaluation of the national currency

 Corporates liabilities in terms of foreign currency are $180 billion greater than
its assets

 Firms are susceptible to lira depreciation

Trade policies, system and barriers

• Average duty rate for imports from the European Union and EFTA nation

dropped from about 10% to 0%

• Turkey is a member of GATT/WTO (Export.gov, 2017)

• Turkey regulates its customs in line with GATT requirements

• Turkey fails to notify the WTO with regard to the changes in import

requirements.
Foreign Direct Investment
(Source: Invest in Turkey, n.d)
 Turkey FDI’s is unaltered by any type of geopolitical
risks
 FDI in Turkey increased by 50.1% in 2017
 Nations that invested in Turkey are Netherlands,
Spain, Azerbaijan, Qatar, and Belgium
 Highest amount of investment was made by Europe at
68%
 Turkey's FDI maintained a horizontal course, at $1.6
billion.
 … Contd.
Year 2012 Net FDI $13628 million

Dropped in the year 2013 by a considerable amount

Year 2013 Net FDI $ 12896 million

Year 2014 Net FDI $ 12828 million

Raised back by a significant amount in 2015

Year 2015 Net FDI $17550 million
Invest in Turkey, n.d
Significant fall in the % in 2016
Year 2016 Net FDI $ 12273 million
 Recommendation

• Turkey’s slowdown is primarily caused due to the long-term structural factor

• The nation needs a more reformist attitude
• Ensure independence of the central bank
• It must move forward with possibly costly but essential reforms.
• Measures increasing accountability and funding for low-performing schools
• Increase in Women’s Participations in Labour Market
 Conclusion

• Turkey is considered as an emerging market

• Turkey has gained remarkable success in addition to the rapid growth in terms of
technology, and agriculture

• Improvements in the ICT all across the nation with rise in young generation
•
• To address high current account deficits, it must aim at improving its exports
Reference List
BBC, 2018. Turkey country profile. [online] Available at: http://www.bbc.com/news/worldeurope-17988453 [Accessed 1 May 2018]

Deloitte, 2015. ICT sector in Turkey 2015 market data. [online] available at: https://www2.deloitte.com/tr/en/pages/technology-media-and-telecommunications/articles/ICT-sector-in-
Turkey.html# [Accessed 2 May 2018]

Export. gov, 2017. Turkey trade barriers. [online] Available at: https://www.export.gov/article?id=Turkey-Trade-Barriers [Accessed 2 May 2018]

Hurriyet, 2017. Turkey’s unemployment rate rises to 12.7 pct, highest in seven years. [online] Available at: http://www.hurriyetdailynews.com/turkeys-unemployment-rate-rises-to-127-
pct-highest-in-seven-years-110818 [Accessed 2 May 2018]

Invest in Turkey, n.d. FDI in Turkey. [online] Available at: http://www.invest.gov.tr/en-US/investmentguide/investorsguide/Pages/FDIinTurkey.aspx [Accessed 2 May 2018]

The World Bank, 2018. Country context. [online] http://www.worldbank.org/en/country/turkey/overview [Accessed 1 May 2018]

Trading Economics, 2018. Turkey GDP growth rate. [online] Available at: https://tradingeconomics.com/turkey/gdp-growth [Accessed 2 May 2018]

World Trade Organization, 2016. Trade policy review body. [pd] https://www.wto.org/english/tratop_e/tpr_e/s331_e.pdf [Accessed 1 May 2018]