Successfully investing in Turkey

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last updated on 27 May 2020 | reading time approx. 1 minute

 

 

 

How do you assess the current economic situation in Turkey?

The Turkish economy takes a complex course with the depreciation of the Turkish Lira, the inflation on the one hand and the consumer-friendly, young population on the other hand. In 2019, the Turkish Lira had a depreciation of 11 per cent in relation to the Euro (compared to the previous year) and 17 Euro in relation to the United States dollar (compared to the previous year). However, the inflation rate (consumer price index) was reduced from 20.30 per cent to 11.84 per cent. The positive trend in the GDP growth has also been maintained. In 2019, GDP has grown by 0.9 per cent. A GDP growth of 1.5 per cent is forecasted for the year 2020.

 

How would you describe the investment climate in Turkey? Which sectors offer the largest potential?

Turkey is still an attractive country for foreign investors. The investment decisions of large company groups such as BASF, Bosch, Siemens, Liebherr, Mercedes Benz and MAN in the recent past show that the investment climate in Turkey is still attractive.
 
The Turkish government is primarily investing in infrastructure expansions. The huge Istanbul airport opened in 2019. The route network of public transport to the new airport will be expanded. Gigantic infrastructure projects such as high-speed train, subway, bridge and tunnel construction are currently on-going on the Bosporus and in the Dardanelles. As part of these projects, the necessity for machines such as excavators, cranes or material handling machines is increasing.

 

There is still potential in the energy sector (geothermal energy, wind power, solar energy, bioenergy and hydropower). The automotive and textile industries, mechanical engineering, chemical and service sectors and logistics, the entire high-tech sector, telecommunications technology and electronics have also great potential.

        

What challenges do German companies face during their business ventures into Turkey?

    German companies face the following challenges:

  • to establish trustful partnerships,
  • legal and tax aspects,
  • political uncertainty and
  • bureaucratic obstacles.
  •  

    High inflation and a weak Turkish Lira are a burden especially for companies on internal market. The industry countered the difficult framework on the internal market with an increase in export earnings and the currency weakness with an increase in the local depth of value added.

     

    Would you advise investors in Turkey to be cautious?

    No, the Turkish economy has still a great potential: A successful economy, a skilled and competitive workforce, a good infrastructure and a central location between Europe and Asia, a large internal market and many other factors still arouse the interest of many investors.

     

    In addition, government investment programs were designed specifically to stimulate investments. For example, investors can benefit from VAT exemption, customs exemption, premium support, interest subsidies and space allocation.

     

    However, investors need to obtain professional advices for planned investments first.

     

    In your opinion, how will Turkey develop?

    The encouraging growth figures and the positive forecasts for the future allows to suppose that Turkey will continue to develop positively. Turkey remains competitive as a link between East and West.

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