Strategically positioned at the nexus of Europe and Asia, The Republic of Türkiye presents a landscape replete with opportunities, where the legacy of ancient trade routes is now intertwined with the vigor of modern innovation. Its geographical advantage provides unparalleled access to diverse markets across Europe, the Middle East, and Central Asia. In addition, the country boasts a substantial domestic market, a youthful and dynamic population, a qualified and competitive workforce and an investment environment characterized by its openness, all of which collectively position Türkiye as a dynamic hub for trade and investment.
As companies worldwide seek to build resilience in their supply chains which experienced significant disruptions related to Covid-19 pandemic and geopolitical tensions and incline towards nearshoring, Türkiye stands out as a country that can offer both geographic advantage and a conducive economic framework for sustainable supply chain reconfiguration, benefitting also from its strong industrial base and infrastructure as well as reduced transit times and logistic costs.
Türkiye offers easy access to 1.3 billion people and a combined market worth of 28 trillion dollars GDP in Europe, Middle East and North Africa and Central Asia within a 4-hour flight radius.
Source: www.invest.gov.tr
Several important steps have been introduced recently to further improve its investment climate. The Middle Term Program (MTP) for 2024-2026 serves as the economic compass for Türkiye, guiding the nation through a meticulously crafted, rule-based economic program. The program has already set in motion a series of concrete measures combined with a timetable that allows an easy performance review, underscoring stability and predictability.
Central to the MTP is the objective to suppress inflation to single digits while reinforcing macroeconomic and financial stability. Macroeconomic policies will be supported with structural reforms and the main aim is to ensure growth in all important aspects, i.e., investment, employment, production and exports. The program is supported by a troika of strategic pillars:
Disinflation: Price stability is the most important component, with concerted efforts aimed at curbing inflation to a single-digit figure by the end of 2026.
Türkiye’s energy sector is strategically situated amidst the world’s proven primary energy reserves, enhancing its status as a pivotal player, especially as the global energy supply trend inclines towards sourcing from nearby and allied countries
Source: Central Bank of the Republic of Türkiye
- Fiscal discipline: It is pursued with the intention to contract the budget deficit to below 3% of GDP, earthquake-related expenditures notwithstanding. The country’s public debt-to-GDP ratio, currently at approximately 33%, is maintained well below the emerging market average. Türkiye has a deliberate policy to keep it below 40%, even lower than the Maastricht criteria of 60%.
Source: Ministry of Treasury and Finance, Türkiye
- Structural transformation: A detailed timetable anchors an action plan aimed at catalyzing economic growth predicated on productivity. This period will involve vigilant monitoring of global developments and the swift enactment of regulations pertinent to the green transition and digitalization. Türkiye’s National Energy Plan, projecting until 2035, delineates a trajectory towards achieving net zero greenhouse gas emissions. This green agenda is propelled by fostering necessary technologies through robust support for R&D, thereby expediting the nation’s ecological transformation and endorsing environment friendly investments that optimize energy and resource efficiency to mitigate the global climate change impact. Notwithstanding the MTP’s three-year horizon until 2026, substantial advancements across all macroeconomic indicators are already being observed.
Türkiye’s economy, known for its dynamism and high potential, ranks as one of the world’s fastest-growing, with an average annual growth rate of 5.4%. For the past decade, economic growth has consistently hovered around the 5% mark, outpacing the sluggish growth experienced globally. Türkiye’s economy has ascended from the 18th to the 11th position globally in terms of GDP at PPP from 2003 to 2021. Türkiye stands among the world’s seven economies with a population exceeding 85 million and a per capita income surpassing 10.000 dollars, that meet these criteria. This year, the GDP has surpassed 1 trillion dollars for the first time. With approximately 12.500 dollars, Türkiye is positioned at middle upper level in terms of GDP per capita income.
Türkiye offers excellent opportunities with its growing, young and dynamic population. The country’s labor force, at approximately 34.3 million, ranks as the second-largest in Europe and is expanding at the fastest rate among the European countries. This young and well-educated demographic is a considerable asset as investors contend with the global challenge of aging populations.
Source: www.invest.gov.tr
Türkiye has significant advantages in terms of energy supply. Türkiye’s energy sector is strategically situated amidst the world’s proven primary energy reserves, enhancing its status as a pivotal player, especially as the global energy supply trend inclines towards sourcing from nearby and allied countries. This advantage is reinforced by its proximity to the Middle East, Central Asia, North Africa, and Europe.
Source: Ministry of Energy and Natural Resources, Türkiye
Since the foundation of the Republic in 1923, Türkiye’s engagement in almost all major international organizations and its amicable relations worldwide have cemented its status as a key international player. Its founding membership in various institutions such as the United Nations, the Council of Europe, and the Organization for Security and Cooperation in Europe (OECD) along with the World Trade Organization (WTO), the Organization for Economic Co-operation and Development (OECD), the European Bank for Reconstruction and Development (ERBD), the World Bank, IMF, the Black Sea Economic Cooperation Organization, the Multilateral Investment Guaranty Agency (MIGA), the Bank for International Settlements (BIS), the Organization of the Islamic Conference and the Islamic Development Bank to name a few, underscores its diplomatic and economic integration into the global framework. Moreover, Türkiye’s commitment to international trade regulations and energy sector collaboration is evidenced by its adhesion to the General Agreement on Tariffs and Trade, WTO and the Energy Charter Treaty.
The Turkish Government’s investment incentive regime is among the most competitive in emerging markets, offering equal treatment for local and international investors. A compherensive investment incentives program is in place with a wide array of instruments that help to minimize costs and accelerate investment returns. These incentives may also be tailored towards projects in priority sectors classified as key areas for the transfer of technology and economic development. In addition, the Turkish Government provides generous support programs for R&D and innovation projects, employee training and export initiatives. In 2022, a total of 440 incentive certificates totaling 100 billion Turkish Liras were issued for international investors, generating employment for 17.000 people.
Source: www.invest.gov.tr
Geographical proximity is becoming increasingly pivotal in supply chains, and Türkiye’s advantageous location renders it a major global manufacturing base. Türkiye offers a wide range of top-quality manufacturing for global product suppliers. The country’s industrial rankings are impressive, leading in Europe and holding prominent positions worldwide in a multitude of sectors. Türkiye ranks:
- 1st in Europe and 2nd in the world in White Goods
- 1st in Europe in Commercial Vehicles
- 1st in Europe and 5th in the world in Cement & Ready Mixed Concrete
- 1st in Europe and 5th in the world in Flat Glass
- 1st in Europe in Solar Panel
- 2nd Europe and 8th in the world in Steel
- 3rd in Europe and 8th in the world in Ceramic Coating
- 1st in Europe and 10th in the world in Agricultural Income
- 1st in Europe in Aquaculture
- 1st in Europe in Unmanned Aerial Vehicle Production.
Over the past decade, the number of foreign companies investing in Türkiye has surged from 5600 to approximately 80.000, a testament to the country’s burgeoning potential.
As global economic paradigms shift and supply chain trends undergo profound transformations, Türkiye, situated between two continents, serves as a bridge between East and West, North and South. Its logistical and labor advantages which makes it a strong and cost-effective hub for major markets, and commitment to green energy resources, coupled with business-friendly policies and political stability, position Türkiye to fully capitalize on these shifting economic tides. The positive impacts of Türkiye’s robust economic program are palpable, and there is a firm belief that the nation is on course to becoming a premier destination for FDI.
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