Why invest in Turkey - NBB

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REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency ISPAT of Turkey Investment Climate in Turkey

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Why you should invest in Turkey

Transcript of Why invest in Turkey - NBB

REPUBLIC OF TURKEY PRIME MINISTRY

Investment Support and Promotion Agency

ISPAT of Turkey

“Investment Climate in Turkey”

AGENDA

Turkey with some key figures…

FDI in Turkey

Top reasons to invest in Turkey

Why Turkey?

Beautiful

landscape…

Home of many

successful

people…

17th largest

compared

economy in the world and 6th when

to the EU Countries in 2013 (IMF)

The largest youth population when compared to the EU countries

ard

32,6 million broadband internet subscribers

(2013)

57 million credit users (2013)

69.6 million GSM users

(2013)

Turkey is the 8th largest steel producer in the world and 2nd compared with

the EU countries (worldsteel 2013)

Turkey is the 17th largest automotive producer in the world (OICA 2013)

Turkey is the 6th most visited holiday destination in the world (2013)

(million)

Out of world’s top 100 best hotels 19 are from Turkey (TUI Holly, 2013)

International tourist arrivals

Country

2013

1. France 83.0

2. USA 69.8

3. Spain 60.7

4. China 55.7

5. Italy 47.7

6. Turkey 39.2*

7. Germany 31,5

8. UK 31.2

9. Russia 28.4

10. Thailand 26.5

Source: UNWTO 2014 edition , TURKSTAT*

‘000

Num 135 wi

40

35

30

25

20

15 1

10 8,8 5,6 6,7

5

FDI in Turkey

125

23,7

Source: Central Bank of Republic of Turkey & Ministry of Economy

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

1,7

FDI inflows

($ billion)

100

75

50

25 17

0

1923-2003 (81 years) 2004-2013 (10 years)

number of companies with foreign capital

37,3

33,8

29,4

25,5

21

18,7

15

0

Soaring FDI inflows

Top reasons to invest in Turkey

Benchmarking performance of the Turkish economy

820 800 800

700

600 516

488 500

400 351 312

277 300

198 189 200

132 95

100 53

0

6

4.9 4.7 5

4.1 4.0 3.7 4

3.4 3.2

3.0 3 2.6 2.5

1.8 2

0.8 0.8 0.8 1

0

Source: IMF, Eurostat and National Sources

Average annual real GDP growth

(%) 2003-2013

2013 GDP (Current Prices, $Billion) Dynamic, Stable & Attractive Economy

o GDP & Income o Key numbers

Population

International Hub

Structural Reforms

Main drivers of the economic growth…

80%

60%

40%

30% 27%

20%

economy driven by

0% -1%

domestic market and

opportunities… -20%

-40% Private

Consumption

Exports Private Public Public Stocks Imports Investment Consumption Investment

Source: TurkStat

63%

11%

7%

-37%

Percentage contribution to real GDP growth 2003-2013

Dynamic, Stable & Attractive Economy

o GDP & Income o Key numbers

Population

International Hub

Structural Reforms

A visionary economy: road to year 2023…

2.000 2.000

1.500

1.000

500

- 25.000

2002 2013 2023 (Target) 25.000

· 20.000 2,3 times

15.000

3 time/s 10.000

5.000

-

2002 2013 2023 (Target)

Source: TurkStat, Hedef 2023

2,3 times · 10.782

3.492

GDP per capita ($)

2,4 times

3,5 times 820

230 /

GDP ($ billion, current prices) Dynamic, Stable & Attractive Economy

Population

o GDP per capita o Age o Labor Force

International Hub

Structural Reforms

Real increase (%) 2002-2012… Lowest income group

in household income

63,6 65

60

55

50

45

40 40,5 40,2 39,8 39,2

35

30

25 top income

20

15

10

5

0

1 2 3 4 5 6 7 8 9 10

Source: TurkStat, 2013

Percentage increase in decile (10%) Income Groups

47,4

34,3

30,8

25,1

7,3

Dynamic, Stable & Attractive Economy

Population

o GDP & Income o Age o Labor Force

International Hub

Structural Reforms

Increasing wealth…

Total wealth (USD Trillion) Wealth per adult (USD) 30.000 1,5

25.000

1,0 20.000

15.000

11.141 10.000

5.000 - 2002 mid 2013 2002 mid 2013

Source: Credit Suisse

1,3

0,5

25.909

11.141

Household liability %

2013

of GDP

100 90

80

70

60

50 40

20 10

0

Turkey Euro Area USA

Source: Central Bank of the Republic of Turkey, European Central Bank, FRED

82

66

Dynamic, Stable & Attractive Economy

Population

o GDP & Income o Age o Labor Force

International Hub

Structural Reforms

Stability and high performance in the economy

Billion USD

160

140

120

100

80

60

40

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: TurkStat

152 152

132 135

107

114

102

86

73

47

36

Exports

Dynamic, Stable & Attractive Economy

o GDP & Income o Key numbers

Population

International Hub

Structural Reforms

EUROPE

GDP: $19,7 trillion Import: $6,6 trillion Population: 672 million

Top reasons to invest in Turkey

1,6 billion people; $26 trillion GDP; $8 trillion trade

Import: $344 billion

Source: IMF World Economic Outlook and WTO; GDP, Imports and population figures as of 2013

CENTRAL ASIA & CAUCASUS

GDP: $433 billion

Import: $106 billion Population: 84 million

MENA GDP: $3,8

trillion

Import: $1,051 billion

Population: 685 million

RUSSIA

GDP – $2,1 trillion

Population: 143 million

Dynamic, Stable & Attractive Economy

o GDP & Income o Key numbers

Population

International Hub

Structural Reforms

Access to multiple markets…

Business capital for regional HQs Multinational Companies (MNCs)

Number of Countries Managed from Turkey

94 80 80 67 36

30

30

30

27 26 22 20

MNCs

Coca Cola GE Healthcare Microsoft Intel Unilever VeriFone

GlaxoSmithKline

BSH

Schneider Electric Alstom Ericsson Cargill

Pfizer

Volvo BASF PepsiCo

Source: Respective Companies, Invest in Turkey 2013

Dynamic, Stable & Attractive Economy

Population

International Hub

o Access to

Multiple Markets

Structural Reforms

Productive and cost-effective labor force

Days 25

20

15 10,8

10 8,3 8,3 8,3 7,8 6,7 6,6

5,7 5,5 4,6

5

0

Hours 55

50

45 42,3 42,1 41,9 41,9 41,7 41,6 41,6 41,1 41,1 40,8 40,6 40,3 39,8

40

35

30 II

Source: *MERCER - Pan-European Employer Health Benefits Issues Survey 2008, **EUROSTAT 2012: The average number of hours corresponds to the number of hours the person normally works. This covers all hours including extra hours, either paid or unpaid, which the person normally works

52,4 Hours worked per week of full-time employment

Annual average**

43,8 43,5 42,8 42,6

III

22

11,9

9,7

Annual average number of sick days per

employee in Europe*

Dynamic, Stable & Attractive Economy

Population

o GDP per capita o Age o Labor Force

International Hub

Structural Reforms

Improving Doing Business: Number of days to set up a company

Turkey in 2013 35 30 25 20 15 10 5 0

Turkey UK Germany

Russia

Switzerland

Czech Republic

Japan

Spain

India Poland

China

Turkey in 2003 25 30 35 40

Romania Russia

Bangladesh

Bulgaria

Poland

Morocco

Cameroon

Turkey

Guatemala

Source: World Bank – Doing Business Report

27

29

30

30

31

36

37

38

39

6

12

14,5

15

18 19,5

22

23

27

30

33

Dynamic, Stable & Attractive Economy

Population

International Hub

Structural Reforms

136

Structural reforms: Yielding Increasing competitiveness

results &

(Percentile)

2009 61

Source: WEF

Global Competitiveness Index

Year Number of Countries

Turkey’s Rank Turkey’s Rank

2004 104 66 63,5

2005 117 66 56,4

2006 125 59 47,2

2007 131 54 41,2

2008 134 63 47,0

45,9

2010 139 61 43,9

2011 142 59 41,5

2012 144 43 29,8

2013 148 44 29,7

Dynamic, Stable & Attractive Economy

Population

International Hub

Structural Reforms

Increasing confidence in the Turkish economy

Turkey’s Sovereign Credit Ratings

2013

Turkey

r ~ Turkey

Ca DDD

Source: Respective rating agencies

S&P Moody’s Fitch JCR

Scale

Jan 2010 Feb

2010

Mar 2013

Scale Dec

2009

Jan

2010

July

2014

Scale

Dec 2009 Jan

2010

Nov

2012

Scale Jan

2010

Feb

2010

May

A

A2

A

AAA+

AAA AAA-

A-

A3

A-

A+

A

A- BBB+ Baa1 BBB+ BBB+

BBB Baa2 BBB BBB

BBB-

Baa3 Negative BBB- Turkey BBB- Turkey

BB+ Turkey Ba1 Turkey BB+ Turkey BB+

BB Turkey BB Turkey Ba2 BB BB- Ba3 Turkey BB- BB- Turkey Turkey B+ B1 B+ B+

B B2 B B B- B3 B- B-

CCC+

CCC

CCC-

SD

Caa1

Caa2

Caa3

-_

-

CCC+

CCC

CCC-

D

CCC

CC

C

D

Investment Grade by JCR in May 2013

Investment Grade by Fitch in Nov 2012

Investment Grade by Moody’s in July 2014

According to the projection by Goldman Sachs, Turkey will be the 9th largest economy in the world and the 3rd largest economy in Europe by 2050.

1. 2. 3. 4. 5. 6. 7. 8. 9.

China U.S.A.

India

Brazil Russia Indonesia Mexico

U.K.

Turkey 10. Japan

Source: Goldman Sacks, 2008

Why Turkey?

The Most Promising Sectors

Automotive Target to produce over 2 million vehicles within 5 years

Transportation Highway capacity planned to be tripled up until 2023 with 12 different project

Real Estate

Third most attractive real estate investment destination in 2012 (AFIRE); Istanbul is the most attractive real estate investment market in 2012 (PwC, ULI); more than $27 billion FDI over past decade.

Finance More opportunities with Istanbul Finance Center

Energy Strategic location for energy terminal and corridor; rapidly growing demand: over $100 billion investment is needed to meet the demand till 2023; privatization and diversification opportunities.

ICT Fastest growing IT companies in the region are from Turkey, 27 of the 500 fastest growing tech companies in EMEA are Turkish. 2011 winner: Logic Bilişim (5-year revenue growth of 28,617% with 412% CAGR).

ON