Making the case for investment in Turkey

Making the case for investment in Turkey

  • Youngest population in Europe (average age 27)
  • Strong domestic demand and large domestic market (78 million people)
  • Key geographic location and free trade agreements with EU, Middle Eastern neighbors
  • Strong manufacturing sector

The AK Party’s victory means a continuation of pro-foreign investment policies

■     The AK Party victory in the parliamentary elections ensures general continuity in the government’s economic policy

■     MNCs can expect the business environment to be very open to foreign investors in Turkey

However, internal and external challenges remain in Turkey

■     Domestic politics will remain contentious over the coming months, but this will not impact foreign investment

■     There is potential for a moderate deterioration in security emanating from the southeast due to an increase in activity by the PKK, the Kurdish militant group, as well as unrest in Syria

■     MNCs planning capital investments over the next six months should take these factors into consideration, but the overall business climate is not expected to be impacted

■     Turkey’s external environment is highly unstable. Events in Europe, the Middle East, and North Africa could impact export demand negatively and dampen the growth outlook for 2011. MNCs should carefully monitor the following key signposts:

  • A deterioration of the euro zone crisis and a renewed recession in Europe
  • Continued unrest in the Middle East and North Africa
  • Positive momentum on the unification of Cyprus
  • A freeze in EU-Turkey talks if (Greek) Cyprus takes over EU presidency in July 2012
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