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Why you should invest in Turkey
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REPUBLIC OF TURKEY PRIME MINISTRY
Investment Support and Promotion Agency
ISPAT of Turkey
“Investment Climate in Turkey”
17th largest
compared
economy in the world and 6th when
to the EU Countries in 2013 (IMF)
The largest youth population when compared to the EU countries
ard
32,6 million broadband internet subscribers
(2013)
57 million credit users (2013)
69.6 million GSM users
(2013)
Turkey is the 8th largest steel producer in the world and 2nd compared with
the EU countries (worldsteel 2013)
Turkey is the 17th largest automotive producer in the world (OICA 2013)
Turkey is the 6th most visited holiday destination in the world (2013)
(million)
Out of world’s top 100 best hotels 19 are from Turkey (TUI Holly, 2013)
International tourist arrivals
Country
2013
1. France 83.0
2. USA 69.8
3. Spain 60.7
4. China 55.7
5. Italy 47.7
6. Turkey 39.2*
7. Germany 31,5
8. UK 31.2
9. Russia 28.4
10. Thailand 26.5
Source: UNWTO 2014 edition , TURKSTAT*
‘000
Num 135 wi
40
35
30
25
20
15 1
10 8,8 5,6 6,7
5
FDI in Turkey
125
23,7
Source: Central Bank of Republic of Turkey & Ministry of Economy
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
1,7
FDI inflows
($ billion)
100
75
50
25 17
0
1923-2003 (81 years) 2004-2013 (10 years)
number of companies with foreign capital
37,3
33,8
29,4
25,5
21
18,7
15
0
Soaring FDI inflows
Benchmarking performance of the Turkish economy
820 800 800
700
600 516
488 500
400 351 312
277 300
198 189 200
132 95
100 53
0
6
4.9 4.7 5
4.1 4.0 3.7 4
3.4 3.2
3.0 3 2.6 2.5
1.8 2
0.8 0.8 0.8 1
0
Source: IMF, Eurostat and National Sources
Average annual real GDP growth
(%) 2003-2013
2013 GDP (Current Prices, $Billion) Dynamic, Stable & Attractive Economy
o GDP & Income o Key numbers
Population
International Hub
Structural Reforms
Main drivers of the economic growth…
80%
60%
40%
30% 27%
20%
economy driven by
0% -1%
domestic market and
opportunities… -20%
-40% Private
Consumption
Exports Private Public Public Stocks Imports Investment Consumption Investment
Source: TurkStat
63%
11%
7%
-37%
Percentage contribution to real GDP growth 2003-2013
Dynamic, Stable & Attractive Economy
o GDP & Income o Key numbers
Population
International Hub
Structural Reforms
A visionary economy: road to year 2023…
2.000 2.000
1.500
1.000
500
- 25.000
2002 2013 2023 (Target) 25.000
· 20.000 2,3 times
15.000
3 time/s 10.000
5.000
-
2002 2013 2023 (Target)
Source: TurkStat, Hedef 2023
2,3 times · 10.782
3.492
GDP per capita ($)
2,4 times
3,5 times 820
230 /
GDP ($ billion, current prices) Dynamic, Stable & Attractive Economy
Population
o GDP per capita o Age o Labor Force
International Hub
Structural Reforms
Real increase (%) 2002-2012… Lowest income group
in household income
63,6 65
60
55
50
45
40 40,5 40,2 39,8 39,2
35
30
25 top income
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10
Source: TurkStat, 2013
Percentage increase in decile (10%) Income Groups
47,4
34,3
30,8
25,1
7,3
Dynamic, Stable & Attractive Economy
Population
o GDP & Income o Age o Labor Force
International Hub
Structural Reforms
Increasing wealth…
Total wealth (USD Trillion) Wealth per adult (USD) 30.000 1,5
25.000
1,0 20.000
15.000
11.141 10.000
5.000 - 2002 mid 2013 2002 mid 2013
Source: Credit Suisse
1,3
0,5
25.909
11.141
Household liability %
2013
of GDP
100 90
80
70
60
50 40
20 10
0
Turkey Euro Area USA
Source: Central Bank of the Republic of Turkey, European Central Bank, FRED
82
66
Dynamic, Stable & Attractive Economy
Population
o GDP & Income o Age o Labor Force
International Hub
Structural Reforms
Stability and high performance in the economy
Billion USD
160
140
120
100
80
60
40
20
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: TurkStat
152 152
132 135
107
114
102
86
73
47
36
Exports
Dynamic, Stable & Attractive Economy
o GDP & Income o Key numbers
Population
International Hub
Structural Reforms
EUROPE
GDP: $19,7 trillion Import: $6,6 trillion Population: 672 million
Top reasons to invest in Turkey
1,6 billion people; $26 trillion GDP; $8 trillion trade
Import: $344 billion
Source: IMF World Economic Outlook and WTO; GDP, Imports and population figures as of 2013
CENTRAL ASIA & CAUCASUS
GDP: $433 billion
Import: $106 billion Population: 84 million
MENA GDP: $3,8
trillion
Import: $1,051 billion
Population: 685 million
RUSSIA
GDP – $2,1 trillion
Population: 143 million
Dynamic, Stable & Attractive Economy
o GDP & Income o Key numbers
Population
International Hub
Structural Reforms
Access to multiple markets…
Business capital for regional HQs Multinational Companies (MNCs)
Number of Countries Managed from Turkey
94 80 80 67 36
30
30
30
27 26 22 20
MNCs
Coca Cola GE Healthcare Microsoft Intel Unilever VeriFone
GlaxoSmithKline
BSH
Schneider Electric Alstom Ericsson Cargill
Pfizer
Volvo BASF PepsiCo
Source: Respective Companies, Invest in Turkey 2013
Dynamic, Stable & Attractive Economy
Population
International Hub
o Access to
Multiple Markets
Structural Reforms
Productive and cost-effective labor force
Days 25
20
15 10,8
10 8,3 8,3 8,3 7,8 6,7 6,6
5,7 5,5 4,6
5
0
Hours 55
50
45 42,3 42,1 41,9 41,9 41,7 41,6 41,6 41,1 41,1 40,8 40,6 40,3 39,8
40
35
30 II
Source: *MERCER - Pan-European Employer Health Benefits Issues Survey 2008, **EUROSTAT 2012: The average number of hours corresponds to the number of hours the person normally works. This covers all hours including extra hours, either paid or unpaid, which the person normally works
52,4 Hours worked per week of full-time employment
Annual average**
43,8 43,5 42,8 42,6
III
22
11,9
9,7
Annual average number of sick days per
employee in Europe*
Dynamic, Stable & Attractive Economy
Population
o GDP per capita o Age o Labor Force
International Hub
Structural Reforms
Improving Doing Business: Number of days to set up a company
Turkey in 2013 35 30 25 20 15 10 5 0
Turkey UK Germany
Russia
Switzerland
Czech Republic
Japan
Spain
India Poland
China
Turkey in 2003 25 30 35 40
Romania Russia
Bangladesh
Bulgaria
Poland
Morocco
Cameroon
Turkey
Guatemala
Source: World Bank – Doing Business Report
27
29
30
30
31
36
37
38
39
6
12
14,5
15
18 19,5
22
23
27
30
33
Dynamic, Stable & Attractive Economy
Population
International Hub
Structural Reforms
136
Structural reforms: Yielding Increasing competitiveness
results &
(Percentile)
2009 61
Source: WEF
Global Competitiveness Index
Year Number of Countries
Turkey’s Rank Turkey’s Rank
2004 104 66 63,5
2005 117 66 56,4
2006 125 59 47,2
2007 131 54 41,2
2008 134 63 47,0
45,9
2010 139 61 43,9
2011 142 59 41,5
2012 144 43 29,8
2013 148 44 29,7
Dynamic, Stable & Attractive Economy
Population
International Hub
Structural Reforms
Increasing confidence in the Turkish economy
Turkey’s Sovereign Credit Ratings
2013
Turkey
r ~ Turkey
Ca DDD
Source: Respective rating agencies
S&P Moody’s Fitch JCR
Scale
Jan 2010 Feb
2010
Mar 2013
Scale Dec
2009
Jan
2010
July
2014
Scale
Dec 2009 Jan
2010
Nov
2012
Scale Jan
2010
Feb
2010
May
A
A2
A
AAA+
AAA AAA-
A-
A3
A-
A+
A
A- BBB+ Baa1 BBB+ BBB+
BBB Baa2 BBB BBB
BBB-
Baa3 Negative BBB- Turkey BBB- Turkey
BB+ Turkey Ba1 Turkey BB+ Turkey BB+
BB Turkey BB Turkey Ba2 BB BB- Ba3 Turkey BB- BB- Turkey Turkey B+ B1 B+ B+
B B2 B B B- B3 B- B-
CCC+
CCC
CCC-
SD
Caa1
Caa2
Caa3
-_
-
CCC+
CCC
CCC-
D
CCC
CC
C
D
Investment Grade by JCR in May 2013
Investment Grade by Fitch in Nov 2012
Investment Grade by Moody’s in July 2014
According to the projection by Goldman Sachs, Turkey will be the 9th largest economy in the world and the 3rd largest economy in Europe by 2050.
1. 2. 3. 4. 5. 6. 7. 8. 9.
China U.S.A.
India
Brazil Russia Indonesia Mexico
U.K.
Turkey 10. Japan
Source: Goldman Sacks, 2008
Why Turkey?
The Most Promising Sectors
Automotive Target to produce over 2 million vehicles within 5 years
Transportation Highway capacity planned to be tripled up until 2023 with 12 different project
Real Estate
Third most attractive real estate investment destination in 2012 (AFIRE); Istanbul is the most attractive real estate investment market in 2012 (PwC, ULI); more than $27 billion FDI over past decade.
Finance More opportunities with Istanbul Finance Center
Energy Strategic location for energy terminal and corridor; rapidly growing demand: over $100 billion investment is needed to meet the demand till 2023; privatization and diversification opportunities.
ICT Fastest growing IT companies in the region are from Turkey, 27 of the 500 fastest growing tech companies in EMEA are Turkish. 2011 winner: Logic Bilişim (5-year revenue growth of 28,617% with 412% CAGR).