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5.1 An overview of the Turkish economy

Major macroeconomic indicators

 

2007

2008

2009

Population (million of inhabitants)

70.6

71.5

72.6

Gross domestic product (US$ billion)

649

742

618

Real GDP growth (%)

4.7

0.7

-4.7

Consumer prices (year-on-year % change)

8.8

10.4

6.3

Exports of goods (US$ billion)

107.3

132.0

102.1

Imports of goods (US$ billion)

170.1

202.0

140.9

Average exchange rate (Turkish new lira per US dollar)

1.2

1.5

1.5

Turkey is an interesting and promising emerging market. Experiences gained in a series of crises in 1994, 2000 and 2001 have strengthened Turkey’s economic tenacity and pliability, which in turn have helped the economy to rebound shortly after bottoming out in 2001, ending up with a cumulative GDP increase of 168% between 2002 and 2009. On the back of such a stronger economic foundation, Turkey, unlike many of its counterparts in the emerging world, has been in a better position to face the economic headwinds battering the global financial markets in 2009. Despite a GDP contraction of 4.7% during the year, Turkey is expected to resume growth of as high as 7% in 2010.

GDP growth and unemployment in Turkey

Source: TurkStat

On the other hand, Turkey’s accession negotiations with the EU since end-2005 offer renewed opportunities for many foreign investors and traders. Given its favourable demographic profile (i.e. large and young) and mature industrial base, Turkey’s economy has been forecast to be the fastest growing economy among the OECD members during 2011-2017 with an annual average growth rate of 6.7%, consistently outperforming that of the EU27.

Notwithstanding the prevailing global economic turmoil, Turkey thus presents unabated opportunities for Hong Kong over the medium to long term. Turkey’s track record of fast economic growth, expanding middle income class and unrivalled geographical advantage as a natural bridge between both East-West and North-South axes raises the odds of a growing regional role in East Europe and the Middle East, creating an efficient and cost-effective access to 1.5 billion consumers in Europe, Eurasia, the Middle East and North Africa.

In light of such a steadfast backdrop, although Hong Kong’s trade with Turkey is relatively small, growth potential cannot be disregarded. While China has made massive inroads in Turkey in recent years, and the Turkish government has organised many official missions to the Chinese mainland, it seems inevitable that Turkey will source more from the Chinese mainland, given its expansion in consumption and industrial production, despite a short-term pullback.

Content provided by Hong Kong Trade Development Council
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