Turkey is a country with a rich history, dynamic culture, and vibrant present. The past decade has been a time of rapid change, ups and downs for the country. Has Turkey changed for the better? Has it reached new heights? The answers to these questions can be found in a new article bythe RAUIE.
The Republic of Turkey is a country with a developed tourism industry, service sector, manufacturing industry, and agriculture. Despite this, the country's economy is unstable.
However, Turkey's economy is on the verge of crisis due to record inflation and a decline in the national currency. The situation is exacerbated by external debts, which could lead to a debt crisis. In 2024, Turkey needs to repay over $182 billion in short-term loans, which must be paid in foreign currency. Additionally, the Republic of Turkey is dependent on imports, which exceeded exports by $106 billion in 2023.
2. Turkey, with its strategic location between Europe and Asia, is an attractive place for investors from around the world, however, the FDI index has decreased compared to 2013, which poses risks and challenges: • Political instability: Turkey has experienced several political crises and attempted coups in recent years. These events can lead to instability and unpredictability in the country, which in turn can affect the investment climate. • Economic instability: Turkey is facing high inflation, currency fluctuations, and issues in the banking sector. These factors can create additional risks for investors, especially those investing in the local currency or relying on the local market. • Legal uncertainty: Despite government efforts to improve the investment climate, Turkey still faces issues with transparency and predictability of the legal system. Difficulties in obtaining permits, bureaucracy, and corruption can create additional challenges for foreign investors.Turkey has set a target to receive a 1.5% share of global foreign direct investment flows. Most investments in Turkey's economy come from EU countries. Russia and the UAE follow in terms of investment volume. Interesting fact: In 2023, the European Bank for Reconstruction and Development invested a record amount of €2.48 billion in Turkey's economy. Over 30% of the amount was invested in the economies of regions affected by earthquakes, and 58% of the investments were "green financing" aimed at preserving and improving the quality of the environment.
3. In 2023, inflation in Turkey reached 65% on an annual basis. The prices in the real estate sector saw the highest increase, rising by 79.83% over the year. There was also significant inflation in the food and non-alcoholic beverages sector – 77.87%. Medical services increased by 66.6%, while alcohol and tobacco prices rose by 65.11%. The lowest inflation was in the ready-made clothing and footwear sector – only 25.87%. Interesting fact: As part of measures to combat rising prices, Turkish authorities decided to temporarily suspend leasing new buildings and cars for three years. The Minister of Finance and Treasury of Turkey clarified that this measure to combat inflation will not be applied in the event of earthquake threats. For other cases, including, in particular, a "standard will be introduced on the square meters per civil servant."4. The salary in Turkey is constantly increasing, but there is still a significant imbalance between workers employed in the trade and tourism sectors and those holding managerial positions. Another important point is that authorities only control the minimum wage threshold, with actual wages being determined by business owners where wage workers are employed. This means that income can vary throughout the year. During the tourist season, a salesperson in a clothing store can earn up to $2000, but during winter, they will earn much less.
Interesting fact: In practice, entrepreneurs in Turkey pay Russian workers significantly more, as language-proficient employees with quality education are highly valued in the hotel business and in enterprises exporting goods to the Russian Federation.
5. While the global community talks about a financial crisis, the number of millionaires in Turkey is increasing, and their capital is growing. According to the latest data, the number of people who can boast this position has exceeded 161,000.Interesting fact: The number of multimillionaires in Turkey increased by 9.7% in a year. In 2022, there were over 1,700 people, and in 2023, over 1,900 people. Thus, Turkey ranks first in the growth of the number of super-rich individuals. The United States ranks second with an 8% increase. According to analysts' forecasts, by 2028, the number of multimillionaires in Turkey will grow to 2,700 people. If the forecasts come true, Turkey will become the third country in terms of the number of super-rich individuals after India and China.
6. In Turkey, two poverty lines are calculated: Local, by households (families living together where representatives of 3-5 generations can manage the household). A household is considered poor if its income is below 50% of the median disposable income of households in the country. According to this criterion, 14.4% of the population in Turkey is considered poor as of 2023. European, according to European Union standards. A person is considered poor if their income is below 60% of the median income in the country. 21.6% of the population is below this threshold. More than every fifth person.In the past two decades, Turkey has made significant progress in fighting poverty on the global stage. Improving the lives of the less privileged, developing the social support system, and reducing the number of impoverished individuals are the main tasks of the Turkish government. The poor receive assistance in the form of food, fuel, as well as financial support for education and healthcare.
In recent years, Turkey has faced economic challenges such as inflation, devaluation, and high unemployment rates. However, despite this, it continues to attract investments and external capital, striving for sustainable economic growth.
To better understand the specifics of each country and achieve real results in Asian countries, it is important to have your own team there, systematically and consistently solving your business tasks on a daily basis. The RAUIE provides opportunities to organize the representation of your company in Asian countries. With minimum costs, you can open a representation of your company based on existing commercial structures of the RAUIE in Turkey, China, India, Vietnam, the Philippines, and Indonesia.
You can submit a request for a free consultation through the feedback form on the website ("Ask a question" on the right side of the page), via email at business@raspp.ru, or by phone at +7-963-963-8363. Natalya Sapunova, Head of the RAUIE Strategic Partnerships Department, will assist you.