Business Monitor International


Turkey Business Forecast Report

Published 24 September 2014

  • 51 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Turkey Business Forecast Report

Core Views

  • Although we view positively Turkey's long-term growth outlook, our real GDP growth forecasts reflect an expectation for below-potential growth in the years ahead. This will result from less abundant foreign capital inflows and slowing domestic credit growth, both key drivers of Turkey's economy.

  • Political instability and social tensions will remain elevated in the run up to general elections in 2015, further weighing on business and consumer confidence.

  • With relatively healthy budget and debt dynamics, the government will provide a more pronounced fiscal boost to the economy. However, recent populist policy initiatives lead us to question the government's commitment to conservative fiscal management.

  • While the government's debt load is low by regional standards, the private sector's rampant external borrowing in previous years has greatly increased macroeconomic risks.

  • After substantial widening of external imbalances in 2013, we expect Turkey's current account deficit to narrow only gradually in coming years due to its dependence on imported energy. Turkey will remain reliant on short-term foreign capital inflows to cover the sizeable current account shortfall, leaving it prone to tightening global liquidity and shifts in international risk sentiment.

  • A dovish central bank will keep inflation well above target and ensure a volatile growth trajectory.

  • A major corruption scandal and increased incidence of popular protest have highlighted the fact that major political challenges still face the country over the medium term. In particular, the ruling Justice and Development party will take an increasingly unilateral approach as it struggles to maintain support, and will face growing and more vocal public and institutional opposition, with the potential for further unrest. Moreover, Turkey faces a challenging foreign policy environment amidst heightened regional tensions as the government attempts to cement its role as an economic and...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
New PM Won't Challenge Erdogan's Authority
8
Table: Political Overview
8
Long-Term Political Outlook
10
Structural Changes To Continue
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Slower, More Balanced Growth Ahead
14
Table: GDP By Expenditure
14
Balance Of Payments
17
Rebalancing Running Its Course
17
Table: Current Account
17
Monetary Policy
19
Monetary Policy Still Too Dovish
19
Tab le: Monetar y Polic y
19
Fiscal Policy
20
Larger Deficits Ahead, But Fiscal Stability Intact
20
Table: Fiscal Policy
21
Exchange Rate Forecast
22
TRY: Macro Fundamentals, Policy Risks Prevent FX Strength
22
Table: Currency Forecast
22
Chapter 3: 10-Year Forecast
25
The Turkish Economy To 2023
25
Convergence To Remain In Play
25
Tab le: Long -Term Macr oec onomic Forecasts
25
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Institutions
28
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
28
TABLE: BMI LEGAL FRAMEWORK RATING
29
TABLE: LABOUR FORCE QUALITY
30
Infrastructure
31
TABLE: EMERGING EUROPE - ANNUAL FDI INFLO WS
31
TABLE: TRADE AND INVESTMENT RATINGS
32
Market Orientation
33
TABLE: TOP EXPORT DESTINATIONS
33
Operational Risk
34
Chapter 5: Key Sectors
35
Pharmaceuticals & Healthcare
35
Tab le: Pharmaceutical Sales , Historical Data And Forecasts
36
Tab le: Hea lthcare Expenditure Trends , Historical Data And Forecasts
37
Tab le: Government Healthcare Expenditure Trends , Historical Data And Forecasts
37
Tab le: Private Healthcare Expenditure Trends , Historical Data And Forecasts
37
Tab le: Telec oms Sector - Mobile - Historical Data & Forecasts
40
Tab le: Telec oms Sector - Wireline - Historical Data & Forecasts
41
Other Key Sectors
43
tab le: Oil & Gas Sect or Key Indicators
43
tab le: Defence & Security Sect or Key Indicators
43
TABLE: Infrastructure Sector Key Indicators
43
TABLE: Food & Drink Sector Key Indicators
44
TABLE: Autos Sect or Key Indicators
44
tab le: Freight Key Indicators
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Eurozone Downgrade On Poor Q214
45
Tab le: Global Assumptions
45
Tab le: Developed States , Real GDP Growth, %
46
Tab le: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Tab le: Emerging Markets , Real GDP Growth , %
47

The Turkey Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Turkey and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Turkey's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Turkey's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Turkey's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Turkey, including currency volatility, the commodity price boom and protectionist policies.

The Turkey Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Turkey economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Turkey through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Turkey Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Turkey and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Turkey, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Turkey over the next 5-years?

BMI's Turkey country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Turkey Market - Political Strengths, Weaknesses, Opportunities and Threats facing Turkey.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Turkey's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Turkey's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Turkey, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Turkey's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Turkey will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Turkey's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express