turkish economy
Turkey’s dynamic economy is a complex mix of modern industry and commerce, along with a traditional agricultural sector that still accounts for more than 35 percent of employment. It has a strong and fast-growing private sector, but the state still plays an important role in basic industry, banking, transportation, and communications. The most important industrial sector is textiles and clothing, which accounts for a third of industrial employment. It faces stiff competition in international markets with the end of the global quota system. However, other sectors, notably the automotive and electronics industries, are becoming increasingly important in Turkey’s export mix.
For many years, real GNP growth has exceeded 6 percent. The economy is changing with the implementation of economic reforms, and GDP growth in 2004 reached 9 percent, followed by annual growth of about 5 percent in 2005-06. Inflation fell to 7.7 percent in 2005, the lowest in 30 years. The country posted strong economic gains in 2002-06, which were largely due to renewed investor interest in emerging markets. Before 2005, FDI in Turkey was less than $1 billion (£515.39 million) a year, but further economic and judicial reforms and possible EU membership are expected to help boost FDI.
Privatization sales are currently approaching $21bn (£10.8bn). Oil has been flowing through the Baku-Tblisi-Ceyhan pipeline since May 2006, marking a major milestone that will bring up to 1 billion barrels a day from the Caspian to the market. Undoubtedly, the government’s commitment to economic reform, supported by prudent macroeconomic and structural policies, has played an important role in strengthening investor confidence in the Turkish economy.
Foreign Direct Investment (FDI)
FDI in Turkey is increasing rapidly as a result of the Turkish government’s constant hard work to make investment easier and more attractive. As a result of government efforts, between January and October 2006 alone, nearly $16 billion (£8.2 billion) was committed to Turkey in the form of FDI.
Money flows into everything from banking to manufacturing, and one sector in particular where FDI has hit record levels is real estate. Several major international real estate companies, such as Emaar Properties and ETA Star, have committed millions to residential and commercial real estate projects in Turkey, and as of 2007, tenders are being held for a number of new projects, such as the largest real estate project project to date in Istanbul for the construction of three skyscrapers and a marina. Donald Trump is said to be in the bidding war for the development to be built in Zeytinburnu.
But Istanbul is not the only area fueled by FDI; there are a lot of investors starting to focus on the southern coast of Turkey, which already has a hugely successful tourism industry, and all this trust and investment contribution is creating jobs, which means that the purchasing power local is improving significantly. .
Tourism
Steady growth: Turkish tourism can be characterized by these two words. The year 2005 was a turning point for tourism in Turkey. In 2004, there was a 29 percent growth in the number of arrivals. In 2005, the growth rate of foreign visitor arrivals was 25 percent. This indicates that Turkish tourism has sustainable growth and stability. Tourism receipts in 2005 amounted to $11.9 billion (£6.1 billion) compared to $10.6 billion (£5.4 billion) in 2004. In 2005, the biggest change was in the number of tourists from non-European countries. The United States, Iran, Denmark and Syria were the countries that showed the highest growth rate in the number of arrivals.
EU talks boost holidays in Turkey.
More and more people go on vacation due to their higher purchasing power. With each step towards Turkey’s EU membership, more people in Europe are considering the Turkish coast as an exotic option that is also close to their homeland. Talks about joining the EU and the booming Turkish economy have made Turkey a favorable haven for investment. Lower inflation and interest rates have stabilized the economy since 2003.
If Turkey can get the FDI it needs and achieve full EU membership, it will become one of the most important and influential countries in the world, as it will strategically and politically represent a bridge between the Middle East and Europe. The future prospects for Turkey and its economy are therefore very positive in the medium and long term, which makes the country an interesting investment opportunity for property buyers seeking significant returns in the same term.
As the Turkish economy continues to expand and living standards improve further, upcoming membership in the European Union will further boost what is already a buoyant economy. The inventory of properties bought and sold in Turkey continues to grow due to ongoing government reforms and partnerships with foreign companies and investors.