HOPE SPRINGS ETERNAL
In 2019, the Turkish economy found itself in a familiar position: recovering. Having fallen into an economic recession for the first time in a decade, the country was forced to employ a number of economic measures honed during the financial crises of the
The response to the interest rate cuts has been immediate among consumers and corporates. In October, car sales in Turkey doubled compared to the previous month and surged 127% YoY, reflecting a sharp increase in demand for personal financing products. Turkey’s three state-owned banks—Ziraat Bankası, Halkbank, and Vakıfbank—have done more than their share, offering below-market interest rate loans for car and home sales. To further encourage privately owned banks to follow suit, the central bank in August decided that banks with higher loan growth can hold lower their reserves, in effect boosting the profits of banks willing to lend.
GOING ABROAD
As manufacturing has slowly moved from the West to the East over the past half-century, Turkey has managed to capture a number of key industries not quite suited for the Asian market. One such example is the niche shipbuilding sector, where a confluence of timely strategic decisions and market conditions has carved out several areas where Turkish companies have thrived. Among these areas include tugs, ferries, offshore vessels, commercial shipping vessels, and other high value-added vessels.
Turkey’s defense industry, which has been the country’s fastest-growing export sector over the past two years, is another industry experiencing growth as a result of strategic investments and market conditions. 2019 has seen Turkey’s defense exports penetrate or expand in a number of markets, largely in Asia, Africa, and Latin America. Many of these region’s countries are wary of falling too far under the influence that comes with US, Russian, or Chinese defense purchases, which makes them prime targets for Turkish defense companies.
FOREIGN INVESTMENT
The single-largest foreign investment in Turkey was inaugurated in 2019. The newly opened STAR Refinery, built by Azerbaijani state oil company SOCAR, has a USD6.3-billion price tag, and its 10-million-ton annual crude oil processing capacity will reduce Turkey’s current account deficit by USD1.5 billion. SOCAR has preliminary plans to invest more money into Turkey’s refining sector, a trend that the government is working to incentivize nationwide. ✖