Investing in Turkey

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A bridge between East & West

Turkey is strategically located as an international hub with access to 56 countries within a four-hour flight distance. Turkish airlines flies to 102 countries with more than 233 destinations.

Favourable demographics

More than 50% of Turkey’s 78m population is under the age of 30 (25% between 0-14). Turkey has the 4th largest labour force compared to EU-27 countries.

Energy corridor

Turkey is one of the fastest growing energy markets in the world at the crossroads of major oil and gas pipelines thanks to its close proximity to 72% of the World’s proven gas and oil reserves.

Dynamic economy

Turkey is the world’s 17th and Europe’s 6th largest economy. Over the past 30 years, the country showed an average economic growth rate of around 4.5% per annum, with fast recovery from severe economic crises.

Underleveraged in public debt

Turkey has one of the lowest budget deficit and debt stock to GDP ratio compared to Europe, well below the Maastricht criteria of 3%. While the households liability to GDP is around 1/3rd of Europe, its mortgage loans to GDP is less than 20% of that of Europe despite rapid growth over the past 5 years.

Resilient banks

Turkey’s financial system is strongly regulated with solid banks having low leverage (7-8x), strong capital adequacy ratio (15%), double-digit growth prospects (10-15%) and lowest non performing loans (3%) in Europe.

Booming pension system

Total investments in the Turkish private pension system (started in 2003) is around US$15bn with 6m savers constituting roughly 2% of GDP, almost the lowest among the OECD countries where the average rate is around 86%. So far only 15% of pension assets are invested in equities, the lowest in Europe.

Current account deficit

Turkey has a chronic balance of payments problem (driven by lack of structural reforms, low savings, high energy dependency etc.), creating a high Turkish Lira volatility at turbulent times. Large swings in foreign capital inflows, create boom and bust in the economy and sharp corrections in the stock market.