News about Turkey

Turkey hosts many important international and national fairs for different industries. In this article, we would like to share the most important fairs in Turkey in February 2020.

You can click on the link if you would like to download the Fairs in Turkey in February 2020.

Antalya, one of the most touristic cities of Turkey broke a visit record in 2019! The Turkish Ministry of Culture and Tourism shared data on the number of foreign tourists coming to Turkey between January and September 2019. So not only Antalya but also almost all cities around Turkey welcome tourists from different countries. More than 41.5 million tourists visited Turkey in the first nine months of 2019.

With 15,644,108 tourists welcomed in 2019, the seaside city of Antalya, in southern Turkey, breaks an all-time record among all the other cities of Turkey.

The Governor of Antalya Province, Munir Karaloglu, reported that in 2019, the tourism sector in the region recorded significant growth. “In 2019, 15,644,108 tourists arrived in our province from Antalya and Gazipasa airports, as well as by land and sea. This trend will continue in 2020,” he assured.

In September, 5,426,818 foreign tourists chose Turkey as a destination for their trips, an increase of 13.23% compared to September 2018.
Turkey received 41,564,536 tourists between January and September 2019, including 36,428,212 foreign tourists, after an increase of 14.5% compared to the same period last year. This tourist attendance generated, in this 9-month period, 26.64 billion dollars in revenues.
Russian tourists were the most numerous in September (+14.7% compared to the same month in 2018). Next came the Germans (+6%), followed by the British (+9.64%). Between January and September, Russians also came in the first place, with an increase of +15.28% compared to the same period in 2018.

In addition, to Antalya, Istanbul, and Edirne were the Turkish cities from which the most entries were made and contributed to the visit record of 2019.

To read more news and articles about Turkey please visit our blog page.

Turkey’s first domestic fighter jet will make its first flight with a domestic engine by 2029, while negotiations to recruit international partners are ongoing.

Turkey’s TF-X National Combat Aircraft (MMU) – a joint project of the Turkish Aerospace Industries (TAI) and the Presidency of Defence Industries (SSB) – is preparing for its maiden flight with a domestic engine in 2029.

According to Osman Dur, Managing Director of TR Engine, a new research and development (R&D) center for turboshaft engines, work on developing the engine is proceeding at full speed, in cooperation with the institutions concerned.

He stated that around 80 engineers have been working on the national engine project for the domestic fighter jet, in cooperation with the Turkish Air Force Command.

“The engine tests should be completed by 2026 or 2027. The first flight of the MMU with a domestic engine will take place in 2029,” he noted.

The MMU is a fifth-generation jet with similar characteristics to Lockheed Martin’s F-35 Lightning II. The domestically built aircraft is being developed to replace the Turkish Air Force Command’s F-16 fighter jets before they are phased out throughout the 2030s.

With the phasing out of F-16 fighters over the next decade, the importance of the domestic fighter jet “TF-X project” has increased.

A model of the national fighter aircraft was first presented at the Paris Air Show in June 2019 and then at the Istanbul Teknofest in September.

The project to develop national capacity for the manufacture of domestic fighter jet engines was initially launched by TAI, but was later taken over by TR Engine, a company created in 2017 by SSB to integrate various engine-related projects under one umbrella. About 55% of the company is owned by the Turkish defense contractor BMC, while TAI holds a 35% stake. SSTEK, a subsidiary of SSB, also holds a 10% share in TR Engine.

In a statement to the Anadolu Agency (AA) on Friday, Osman Dur, Group’s managing director, stated that the company had been negotiating with international engineering and design companies, as well as original equipment manufacturers (OEMs), as design and production were two separate operations. “There is no point in designing technologies that we can’t put into production. Therefore, we are continuing our best efforts to develop local suppliers for the domestic aerospace industry,” he said.

Human Resources in Aviation

Dur said that Turkey has a well-developed institutional structure in the aviation and aerospace industry and there wouldn’t be any problems in terms of human resources. “There are a few people with experience in critical technology sectors, but we have the experience and the links to attract more human resources from around the world,” he stated.

He added that the civil aviation sector in Turkey contributes to the defense industry in several technological areas, including computer science, software and artificial intelligence (AI), unlike in the past when the defense industry supported the development of civil sectors.

He stressed TR Engine’s role in uniting industry personnel with academics working in the field. The center also encourages university students to apply for jobs in the sector.

If you would like to read more about the aviation sector in Turkey you can check out our latest article.

The U.S.-based clean technology company, Taronis Technologies, will open a facility in Turkey to operate the gasification units, the company stated in a press release on Saturday. The company is in the process of providing technological solutions to renewable fuel and sterilization problems through the use of its clean gas technology.

Taronis Technologies stated that 300kW gasification units will be produced at the facility that will be opened with an investment of $200 million.

In mid-November 2019, the company made an announcement about the launch of a Turkish joint venture, Taronis Fuels Turkey Gaz Enerji Sanayi ve Ticaret Limited Şirketi.

The press release also indicates that the legal process for the Ankara-based company has also been completed and that Turkey will supply all equipment for the production.

“Turkey’s strategic location in the heart of Europe, where the continent meets the ancient Silk Road trade route, offers competitive access to European and Asian markets,” said Scott Mahoney, CEO of Taronis Technologies, in the statement. “This will allow Taronis to access productive markets while seeking to accelerate the sale of additional gasification units to neighboring countries and the boom in sustainable fuels around the world.”

“With the possible sale of an additional fifty gasification units, this has the potential to generate millions of dollars in additional royalties back to Taronis Technologies. We have recently announced a share buyback program. We hope that shareholders can now begin to better understand why we canceled our recent proposed financing transaction and instead elected to pursue this strategy. We believe that the opportunity to collect scalable royalty income from international unit sales has the ability to deliver significant value beyond the initial Turkish joint venture,” concluded Mr. Mahoney.

Facebook is preparing to open eight offices in Turkey, of which the center will be in Istanbul. The first office will be opened in Bursa in January to discover young entrepreneurs. Each of the offices will be established in different cities.

Chairman of the Commodity Exchange of Bursa Ozer Matlı stated that the opening of the Facebook offices in Turkey is affiliated with TOBB and the Association of Habitat. The center for the studies is determined as Istanbul, Matli said, yet Facebook went to 8 different cities to open the other branch offices.

Mr. Matlı, Chairman of Bursa Commodity Exchange, as well as the presidency of Turkey Chambers and Commodity Exchanges (TOBB) Board Member, explained that thanks to this office, young entrepreneurs, will be able to initiate new projects in digital media. Mr. Matlı stated that they signed a protocol with one of the universities in Bursa concerning Facebook’s office and said that young people would start to develop digitalization-based business models with the studies in the near future.

In most countries of the world, men are more likely to belong to the labor market than women. Nevertheless, these gender differences in participation rates have narrowed considerably in recent decades. When we take a look at Turkey, we see that in the last two years, a total of TL 8 billion in loans at favorable rates have been granted to women entrepreneurs.

Through the state-owned banks, the Turkish authorities have granted more than 8 billion TL in loans to women entrepreneurs in the last two years. Around 80.000 women managers of small and medium-sized enterprises have been provided with interest-free loans for amounts below 50.000 TL and at low rates for amounts up to 300.000 TL.

For several years, the Turkish authorities have been pursuing a policy aimed at increasing the number of women in the labor market. Between 2005 and 2017, the labor force participation rate of the female population aged 15-64 increased by 12 points to 37.6%. The Government intends to continue this trend and has set itself the goal of reaching 41% by 2023.

Along with Turkish government support, many countries are encouraging women to take place in the labor force. Here is a map that shows the ratio of female to male labor force participation rates in 2017. Since then the rates have been increasing in many countries around the world.

As ERAI Turkey, our team also mostly consists of female employees which can be accepted as positive discrimination. We would like to support you if you are interested in investing in Turkey and recommend you to take a look at our articles about how to set-up business in Turkey and you will see how easy to follow the eight steps to establish your company.

You can also check our page about recruitment services if you want to enter the Turkish market with fewer risks and we can find the most suitable candidate for you and deal with all the bureaucratic issues on your behalf so that your employee can start working for your business immediately.

Work on the motorway linking Istanbul to Izmir, which began in 2010, was completed almost two months ahead of schedule in August 2019.

The motorway linking the Marmara region to the Aegean regions, which began in 2010, is one of the country’s largest infrastructure projects. While the initial opening date was planned for October, yet it was open to the public from August 4, 2019, just in time for the Bayram festivities. Transport Minister Cahit Turhan said that thanks to this motorway, it would be possible to connect Istanbul to Izmir in 3.5 hours, as opposed to 9 hours previously.

The Istanbul-Bursa-Izmir highway project has a total length of 426 kilometers, including 384 kilometers of highway and 42 kilometers of the access road. According to the minister, the Osmangazi Bridge, which has been open since 2016, has also been a key element in this timesaving. It reduces travel time by an hour and a half.

“The Istanbul-Bursa-Izmir highway is one of the biggest projects in Turkey’s recent history,” said Cahit Turhan. He added: “This project, which will integrate Istanbul and İzmir, makes Bursa a crossroads. “Indeed, the cities served by this new section will benefit from significant economic spin-offs. On average, 5,000 people have found employment on the construction site, and the government promises 1,000 additional jobs in maintenance and operation services.

The estimated $7 billion costs of the project have been paid for by the company that will operate the highway indefinitely. Cahit Turhan assures that no public funds have been used for construction, but that 2.5 billion has been allocated by the public authorities for expropriation. “This will make a significant economic contribution to the road users and will save time and fuel and provide important opportunities and facilities, especially for the transport of industrial and agricultural products in Turkey and abroad on this road,” he welcomed.

However, while drivers will certainly save fuel, it should be noted that the use of the highway will be charged in addition to the price of the bridge, which currently costs 103 TL per passage.

Turkish exports increased by 0.1% in November 2019, year-on-year.

The Turkish Statistical Institute (TUIK) and the Turkish Ministry of Commerce announced provisional Turkish trade data on Tuesday.

Turkish exports increased by 0.1% in November 2019 compared to the same period in 2018. The total amount of exports was $15,503 million.

Imports also increased by 9.7% in the same period, reaching $17,737 million.

The trade deficit was 2,234 million dollars. The coverage rate, which was 95.8% in November 2018, increased to 87.4% in the space of one year.

As regards the January-November period, the volume of exports was 156 billion 886 million dollars, after an increase of 1.8%, and that of imports was 183 billion 686 million dollars, with a decrease of 11%, year-on-year.

The trade deficit fell by 48.8% in the January-November 2019 period compared to the same period last year. This deficit is 26.8 billion dollars.

Germany was the first target for Turkish exports ($1,393 million). It was followed by Iraq ($956 million), the United Kingdom ($915 million), and Italy ($837 million).

On the other hand, the leading source country for Turkish imports was Russia ($1,985 million). It was followed by China ($1,772 million), Germany ($1,656 million), and the United States ($802 million).

Turkish entrepreneurs expect Turkey’s construction sector will recover in the third quarter of next year, said the head of the Anatolia Contractors Association. The sector has been through a difficult period since August 2018, but interest rate cuts have been supporting the industry since late last summer, said Melih Tavukçuoğlu.

Last year, the Turkish economy faced difficulties related to foreign currency attacks and rising costs and interest rates, which led to a slowdown in the construction sector. The US dollar/Turkish lira exchange rate, currently hovering around 5.6-5.7, rose to 6.5-7 last year from 3.8 at the end of 2017.

The Central Bank of Turkey has lowered its key rate from 8% to 24% last year to 14% gradually during monetary policy meetings this year. Currently, private and state-owned banks grant housing loans with interest rates of around 0.8% and 1%.

Tavukçuoğlu stressed: “These levels, up to 0.7% to 0.8% or even 1%, are excellent rates for our sector.” Meanwhile, the demand for houses is not at the desired level but is much better than the rates of 1-1.5 years ago, he noted.

“About 200 types of goods are built for the construction sector in Turkey,” he said, adding that the construction sector in Turkey should be revived for all these secondary sectors.

In Turkey, every year, about 700,000 new houses are built while more than 1 million new and second-hand houses are sold.

The country eased citizenship requirements for foreigners last year by reducing the property value limit to $250,000.

Following the decision, the number of home sales to foreigners increased by 19% year-over-year in the January-October period.

Turkey Focuses on Africa, Russia, and the Middle East

Turkey is the best country after China in the global construction market with its cost advantage and the pace of projects, he said.

So far, Turkish contractors have undertaken about 10,000 projects worth $400 billion in 126 countries.

“But there is a recession in the world. We have targeted dynamic regions such as Africa, Russia, and part of the Middle East,” he said.

Turkish entrepreneurs are taking on significant projects in African countries, Qatar, Russia, and the Turkish republics.

He added: “I hope that the Syrian war will come to an end and that a consensus will be reached in Iraq. There will be a serious investment here.”

Turkey competes with Italy, Germany, and the US in the global construction market, he noted. Turkish contractors, who complete projects quickly, can also take on high-quality construction projects that require longer lead times and higher budgets resumption of construction.

The “Annual Program of the Presidency of the Republic,” which outlines the prospects for the Turkish Economy for the year 2020, was published on 5 November. It foresees an ambitious recovery of the economy with a high growth rate (5%).

The government’s growth forecast for the year 2020 seems ambitious compared to the expectations of banks and international institutions.

According to the “Annual Program of the Presidency” published on 5 November 2019, GDP contracted by 1.9% during the first half of 2019 before rising in the second half of the year, driven in particular by the agricultural sector (2.2% increase in value-added), by the recovery of the services sector (+0.9%, including construction) and by a smaller fall in industrial activity (-0.1%).

For 2019 as a whole, the program anticipates GDP growth of 0.5%, or USD 749 billion. For the year 2020, the plan forecasts an acceleration of growth, driven by the Central Bank’s cut in interest rates, the fall in the inflation rate (which should reach 8.5% by the end of 2020), the stability of the exchange rate and policies aimed at increasing the distribution of credit. Also, for the year 2020 as a whole, the program estimates that activity will be supported by growth in the industrial (+6%), services (+5%), and agricultural (+4%) sectors. Besides, the government anticipates an increase in consumption (private and public sectors combined) of 4.6% in real terms (i.e., a level twice as high as that forecast by the World Bank). Finally, the program anticipates a 5% growth for 2020, i.e., a GDP of 812 billion USD.

The “annual program of the Presidency” and the budget for 2020 have very high ambitions in terms of growth and budgetary control. The average growth forecast published by the leading banks and international institutions, around 2.4%, seems much more realistic, mainly because, despite the incentives implemented by the government and the Central Bank, credit distribution is still marking time. This more measured growth forecast also has an impact on the public finance projections: a deficit just below the 3% threshold seems hardly credible because a more moderate recovery in growth will, all other things being equal, lead to lower tax revenues. Nevertheless, the consolidation of public accounts remains more necessary than ever to increase the transparency of them, strengthen the credibility of government action, and reassure investors.

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Over the past 10 years, the Turkish economy has grown at one of the fastest and most prosperous rates which resulted in a growth in GDP values of Turkey as well. In this article,  Turkish GDP growth in recent years is explained.

According to the Turkish state website invest.gov.tr, macroeconomic strategies, fiscal policies and structural reforms have brought stability and security to the Turkish financial sector. Thanks to this stability, Turkey has been able to rank among the countries in its region with the highest FDI (foreign direct investment) figures in recent years.

Nevertheless, 2019 will be marked by negative GDP growth in Turkey due to the collapse of the pound since last year. Turkish GDP growth had so far shown exemplary results with an average annual rate of 5.3% between 2003 and 2016. This rate had even been ranked among the best in the world during this period.

Let’s see how this was distributed over the country’s activity in 2017.

GDP by sector in Turkey

In 2017, Turkish GDP by sectors was estimated as follows:

– Agriculture accounts for 6.8% of Turkish GDP

This sector, which, according to the Société Générale study on Turkey, employs nearly 19% of the population, is in constant decline and suffers from a decline in productivity, too. The 11% of land used for agriculture mainly produces wheat, tobacco, and hazelnuts but is not enough to supply the country whose imports, particularly in livestock, are growing exponentially.

– The industry represents 32.3% of Turkish GDP

Turkey has a rich industry that maintains constant and stable growth. The workforce and local know-how allow Turkish industry to stand out while being competitive. Very large infrastructure projects also allow the industry to constantly evolve. The automotive sector, as well as the textile sector, are the two main areas of Turkish industry.

– Services represent 60.7% of Turkish GDP

Globalization and the modernization of the country have strongly elevated the service sector since the early 2000s to undergo a significant decline and then stabilization after 2010. The sector which employs 58% of the Turkish workforce also includes the tourism sector which, after having experienced a significant decline, is returning to the forefront with significant growth which directly affects the Turkish GDP growth.

In 2019, the most active and prosperous Turkish sectors were textiles, automotive, construction, software, jewelry, and chemicals.

Future and forecasts

According to the OECD, Turkey’s growth is expected to be one of the most dynamic between 2015 and 2025 with an average annual rate of 4.9% and its foreign trade should be stimulated. In times of recession, Turkey’s economic performance and Turkish GDP growth are now lower than in previous years (estimated at 0.4% for 2019) but satisfactory given the crisis it is experiencing. Gita Gopinath, head of economic affairs at the IMF, estimates that 2020 will be a better year for Turkey’s economy, which should “emerge from its recession”. In her view, any aid would be “useless”, as the country could recover on its own, focusing in particular on greater transparency.

For further reading, you can have a look at our article about why you should invest in Turkey.