Successfully investing in Turkey


last updated on 9 September 2022 | reading time approx.minutes




How do you assess the current economic situation in Turkey?

The Turkish economy is experiencing a complex course with the depreciation of the Turkish Lira and inflation on the one hand and the young society with a high propensity to consume on the other. In 2021, the Turkish Lira suffered a loss in value of almost 40 per cent against the Euro and 44 per cent against the US Dollar (both compared to the previous year). The inflation rate rose to 36.08 per cent in 2021 and is still rising in 2022. The year-on-year inflation rate in August 2022 is 80.21 per cent. The Central Bank of Turkey's key interest rate has been reduced by 3 percentage points year-on-year to 14 per cent. GDP increased to USD 806.8 billion in 2021 (2021: USD 719.92 billion). GDP thus recovered rapidly after a severe pandemic-related slump and has increased compared to the previous year. 


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

Turkey, as a growth country, continues to attract foreign investors and is well positioned with different industries and resources. The investment decision of large corporations in the past confirms the attractive investment climate in Turkey.
The production and manufacturing sector, with motor vehicles, automotive parts and machinery as a pioneer, has large capacities and good experience with predominantly foreign manufacturers and joint ventures. In addition, the electro technical, household goods and consumer goods sectors are considered as popular and profitable investments
Due to the advantageous geographical location and climate, the still largely undiscovered agriculture and agriculture as well as seeds and fertilizer technology offer considerable investment potential.
In the energy sector, Turkey offers enormous potential especially in the field of renewable energies and is considered a major growth market.
The iron and steel industry, in addition to other raw materials and minerals, has additional potential for development and expansion. The same applies to the textile industry, mechanical engineering, chemical and service sectors and logistics, the entire high-tech sector, telecommunications technology, and electronics.

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

    German companies must face up to the following challenges:
  • building trusting partnerships,
  • legal and fiscal issues,
  • political uncertainty and
  • bureaucratic hurdles.
    Expert advice in advance of a planned investment is always recommended.
    High inflation and the weak Turkish Lira are particularly burdensome for domestic market-oriented enterprises. The difficult framework conditions of the internal market were met by industry with an increase in export earnings, while currency weakness with an increase in the depth of local value added.


    Turkey was one of the few countries to record a growing economy for the pandemic year. How sustainable is the success?

    Turkey proved to be largely adaptable in the pandemic year and responded to the changing conditions of the economy with quick measures and restructuring. Government support through loans with favourable interest rates provided significant bridging support for the private sector. The steady expansion of digitalisation as well as its integration into everyday working life also represent a relevant key to success. The large potential of qualified and competitive labour, good infrastructure and the central location between Europe and Asia continue to be sustainable growth factors. The government's orientation towards increased investment, especially in the regional production and manufacturing industry, as well as in the energy and environmental sector (e.g. sustainable and renewable energies), points to a good basis for further development.


    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.

The rapid adjustment to the conditions and consequences of the pandemic as well as the continued growth of the economy maintain the positive outlook for the future. The medium- to long-term opportunities for companies continue to be assessed as good. The country has good growth rates compared to Europe, a young, well-educated population and, above all, entrepreneurial people. Measures to counter the current decline in the value of the Turkish Lira and the accompanying inflation are various stabilisation packages related to, among other things, losses from exchange rate fluctuations and the promotion of Lira deposits.


The Turkish economy can grow strongly in the coming years while limiting inflation. It is now important to curb inflation and thus exchange rate fluctuations, rebalance the current account and boost investor confidence.


Due to various experiences of crises, Turkey brings with it a certain resistance to crises and the associated ability of the population to act and adapt. This is a significant difference to other countries.


As a link between East and West, Turkey remains competitive and an important economic partner.


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