Business News Turkey July 2024

Business

Major Russian investment in Izmir

Zenith RS, one of Russia’s largest manufacturers of industrial shelves, has made its first investment outside of Russia in the Aegean Free Zone in Gaziemir, Izmir. The company is also continuing to invest in its second plant in the Western Anatolia Free Zone in Bergama, aiming to create more than 1,000 jobs by investing EUR 50 mn in the two plants in the province of Izmir. The company intends to achieve an export volume of EUR 150 mn by targeting various countries in Africa, Asia and Latin America.

June 11, 2024

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Crypto law enters into force

A law on the regulation of crypto assets has entered into force in Turkey. The law requires crypto asset service providers to obtain permission from the Capital Markets Board (SPK) for their establishment and commencement of operations, and they must exclusively carry out the activities to be determined by this regulatory body. Prices shall be formed freely on crypto asset trading platforms.

July 2, 2024

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SWM to produce in Turkey

The Italian company SWM, which operates under the umbrella of Shineray Group, one of China’s leading automotive manufacturers, has applied for a production permit in Turkey. The plant, with a planned capacity of 50,000 vehicles, is to produce electric and hybrid cars as well as certain commercial vehicles. Anton Chernov, CEO of ATMO Group, which represents SWM in Turkey, said the production facility shall be geared both to the needs of the Turkish market and to exports to the Balkans and other markets in the EU. Chernov added that the final decision on the investment project will depend on the support measures provided by the state.

July 8, 2024

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BYD invests in Turkey

An agreement has been signed between the Chinese electric vehicle manufacturer BYD and the Turkish Ministry of Industry and Technology regarding a large investment by BYD. According to the agreement, a production facility for electric and plug-in hybrid cars with an annual capacity of 150,000 vehicles as well as an R&D centre for sustainable mobility technologies are to be established in Turkey. The vehicles and equipment to be produced in the Organized Industrial Zone of Manisa will be exported to other countries, primarily Europe, in addition to sales in the domestic market. The facility, which is expected to start production by the end of 2026 following an investment of USD 1 bn, has been planned to create jobs for up to 5,000 people. Notably, this is the first direct foreign investment in the Turkish automotive sector in 27 years. Stella Li, BYD Vice President and CEO of BYD Americas, stated her company’s intent to make Turkey an innovation centre.

July 9-12, 2024

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Politics

Erdo?an visits Spain

Following a meeting between Spanish Prime Minister Pedro Sánchez and Turkish President Recep Tayyip Erdo?an in Madrid, 11 agreements were signed between the two countries in various fields, including economy, technology and education. Erdo?an stated that although the Turkey and Spain have excellent relations in all areas, the joint potential in economy and trade could not be fully realised as the Customs Union has not yet been updated and the visa practice for Turkish businesspeople is very strict. Erdo?an also emphasised that the mutual trade volume of USD 19.2 bn last year had approached the target of USD 20 bn, and that Spain, with 740 companies, ranked sixth among the countries with the most investments in Turkey.

June 14, 2024

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Turkey participates in SCO Summit

President Erdo?an travelled to Astana, the capital of Kazakhstan, for the Shanghai Cooperation Organization Summit, where he also met with Russian President Vladimir Putin as part of his contacts. Erdo?an pointed out that the trade target between the two countries was USD 100 bn, while Putin said that despite all the difficulties in the world, the relations between Russia and Turkey have been progressing step by step. At the meeting between Erdo?an and Chinese President Xi Jinping, Xi stated that he supports Chinese companies in their growth in Turkey.

July 4, 2024

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Economy

Turkish Central Bank keeps interest rate constant

The Central Bank of the Republic of Turkey has decided to maintain its policy rate (the one-week repo auction rate) of currently 50.00%. The bank stated that “the tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range.”

June 27, 2024

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More exports, less imports in May

In May 2024, the exports of the Turkish economy increased by 11.3%, whereas imports decreased by 10.4% over the same month of the previous year (YOY). With exports amounting to USD 24.1 bn and imports to USD 30.6 bn, the trade deficit diminished by 48.0% during the same period, reaching USD 6.5 bn. In May, Germany remained Turkey’s most important export partner (USD 1.9 bn), followed by the UK and the USA (each USD 1.5 bn). China continued to be the country with the most imports to Turkey (USD 3.9 bn), ahead of the Russian Federation (USD 3.8 bn), and Germany (USD 2.3 bn).

June 28, 2024

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Turkey removed from “grey list”

The intergovernmental organisation Financial Action Task Force (FATF) has removed Turkey from its “grey list”. The outgoing FATF President, T. Raja Kumar, stated that Turkey has overcome its deficiencies in the fight against strategic money laundering and terrorist financing. This development is expected to increase Turkey’s economic reputation in the international arena.

June 29, 2024

Inflation slows down

In June 2024, consumer prices in Turkey rose by 1.64% over the previous month, with a CPI increase of 71.60% YOY. The biggest monthly price hike was in housing (3.79%), followed by education (3.47%). The largest decreases occurred in clothing and footwear (-0.58%) and transportation (-0.13%). The highest annual price increase was in education (107.11%). The domestic producer price index (D-PPI) went up 1.38% on a monthly basis, and 50.09% YOY.

July 3, 2024

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Industrial production further declining

In May, Turkey’s industrial production index decreased by 0.1% YOY, with the manufacturing industry recording a minus of 0.4%. The highest increases in the manufacturing industry category were reported in the product groups “repair and installation of machinery and equipment” (10.8%), “food products” (7.1%), and “other transport equipment” (6.0%) while the biggest decreases occurred in the product groups “leather and related products” (-12.4%), “printing and reproduction of recorded media” (-10.2%), and “basic pharmaceutical products and pharmaceutical preparations” (-8.9%).

July 10, 2024

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Unemployment rate continues to drop

In May 2024, around 3,011,000 people in Turkey aged 15 and older were officially out of work. The seasonally adjusted unemployment rate was 8.4%, one tenth of a point lower that in the previous month, and 1.1 points down YOY. The labour force participation rate amounted to 54.5% in total, and 37.1% for females.

July 10, 2024

Overview of Monthly Data

Growth Rates

Inflation