As 2024 draws to a close, economic forecasts indicate stable growth for Türkiye, with an average growth rate estimated at 2.98% for 2024, although projections range from 2.70% to 3.20%.

At the same time, the country has made significant progress in its fight against inflation, achieving a reduction of 26.9 percentage points over five months. In October, inflation stood at 48.6%. The Central Bank maintained its key policy rate at 50.0% while revising its year-end inflation forecasts upward to 44% for 2024 and 21% for 2025 (compared to the previously estimated 38% and 14%), reflecting adjustments to economic expectations in the face of ongoing challenges.

These economic improvements and a commitment to financial stability led Standard & Poor's (S&P) to upgrade Türkiye's credit rating. In its recent November assessment, the agency highlighted that economic resilience, coupled with adjustments to fiscal and monetary policies, justified this positive update. This decision reflects increased confidence in Türkiye's ability to address structural challenges while supporting growth and controlling inflation.

The three major credit rating agencies have adopted a favorable stance toward Türkiye this year. S&P was the first to upgrade its rating in May, citing a "rebalanced economic strategy" as the justification. This revision aligns with the two rating upgrades granted by Fitch Ratings in 2024. Meanwhile, Moody’s also upgraded Türkiye’s rating in July, marking the first improvement in a decade, emphasizing significant progress in governance.

Finally, November witnessed a resurgence of foreign investor interest in the Turkish market. Significant investment decisions, involving substantial amounts, were announced by leading players such as the Chinese Kaishan Group and the Swiss AMAC Aerospace. The sectors targeted by these investments demonstrate increased diversification, further solidifying Türkiye’s position as a key destination for international investors.

Kaishan Group Invests $1 Billion in Türkiye

The Chinese group Kaishan Group Co. Ltd., one of the largest compressor manufacturers in the world, is preparing to make its first investment in Türkiye. The Chinese giant plans to build a state-of-the-art factory on a 20,000 m² site within the İZBAŞ Free Zone – İzmir Serbest Bölgesi (Izmir) to produce compressors used in industrial facilities.

Investment amount: $1 billion.

The project is expected to commence with the groundbreaking ceremony in Q1 2025 and be completed within one year. The large-scale compressors will primarily be used in geothermal power plants, as well as in other heavy industries. This major investment will be the largest project of its kind in Izmir since the STAR Refinery, built by SOCAR and commissioned in 2018.

Founded in China in 1956, Kaishan Group is one of the leading global manufacturers of industrial compressors. The company employs over 6,000 people worldwide and exports its products to more than 80 countries. With an annual turnover exceeding $1.5 billion, Kaishan is a recognized leader in compression technologies serving various sectors, including energy, heavy industry, and infrastructure. The company holds over 300 patents and is strongly committed to R&D for innovative and sustainable solutions.

Source: Dünya, November 18, 2024

AMAC Aerospace Invests $100 Million in Türkiye

AMAC Aerospace Switzerland AG, one of the global leaders in aircraft maintenance and repair, is expanding its presence in Türkiye with a significant $100 million investment to construct a new hangar at Milas-Bodrum Airport, scheduled for completion in 2026. Spanning 32,000 m², this facility will strengthen Türkiye's strategic position as a key hub for aviation maintenance in Europe and the Middle East.

Already established in Türkiye for several years, the Swiss company operates hangars in Istanbul and Bodrum, where it serviced over 80 aircraft in 2024, including wide-body commercial and private jets. The new facility at Milas-Bodrum will not only enhance the company’s capacity but also expand its local footprint, creating more than 300 new jobs.

AMAC continues to leverage Türkiye’s geostrategic location at the crossroads of global air corridors and its highly skilled workforce to provide world-class aircraft maintenance and private jet refurbishment services.

This expansion is part of a cumulative $50 million investment that AMAC has already made in Türkiye, a key market for aviation thanks to its developed infrastructure and efficient supply chain network.

Source: Ekonomim, November 14, 2024

Atlas Copco Acquires Türkiye's SCS Makine

The Atlas Copco Group, a global leader with over 150 years of history in industrial solutions, has strengthened its position in the Turkish market. The Swedish giant, operating in 180 countries with 53,000 employees, recently announced the acquisition of SCS Makine A.Ş., a compressor distributor based in Adana, southern Türkiye. With this acquisition, Atlas Copco, active in Türkiye since 1950, continues to grow in the region while ensuring enhanced service for its current and future customers.

Founded in 2011, Türkiye-based SCS Makine specializes in the sale and maintenance of air compressors, as well as OEM and original spare parts, particularly for screw, centrifugal, and oil-free compressors. With a team of 11 employees, the company is a recognized player in key sectors in Türkiye, including textiles, cement, chemicals, and food processing. In 2023, SCS Makine reported a turnover of approximately 100 million TRY.

Philippe Ernens, President of the Compressor Technique business area at Atlas Copco, stated that this acquisition would further expand their geographical presence and enhance their ability to deliver efficient and sustainable solutions to Turkish businesses. This move aligns with Atlas Copco's global commitment to energy-efficient solutions and its longstanding dedication to responsible and sustainable industry practices.

Source: Ekonomim, November 7, 2024

S&P Upgrades Türkiye's Credit Rating to BB-

S&P Global Ratings has upgraded Türkiye's credit rating to BB- for the second time this year, acknowledging the country’s economic stabilization efforts driven by a strict monetary policy. This upgrade reflects the success of measures aimed at stabilizing the Turkish lira, reducing inflation, and strengthening reserves. The improvement is also linked to narrowing the current account deficit and making progress in de-dollarization.

Outlook: The stability of risks over the next 12 months will depend on the authorities’ ability to manage inflation, balance the economy, and address wage expectations.

Opportunities for further improvement: A return to lower inflation levels and increased confidence in the Turkish lira could lead to additional rating upgrades.

Additionally, the Central Bank remains optimistic in the long term. In August, it maintained its inflation forecasts, projecting 38% by the end of the year, 14% in 2025, and 9% by the end of 2026.

The three major credit rating agencies have adopted an optimistic tone toward Türkiye this year. S&P first upgraded its rating in May, citing a "rebalanced economic strategy," and this latest decision aligns with the two rating upgrades granted by Fitch Ratings in 2024. Moody’s also improved Türkiye’s rating in July, marking its first upgrade in a decade, citing improved governance.

Türkiye continues to battle chronic inflation in 2024, although Ankara’s disinflation strategy has brought it down to just under 50% in September, compared to over 75% in May, according to data from the Turkish Statistical Institute (Turkstat).

Source: The National News, November 2, 2024

FDI Reaches Nearly $8 Billion in Türkiye

Recent figures confirm the positive momentum of foreign direct investment (FDI) in Türkiye. With $7.7 billion invested during the first nine months of 2024—an 8% increase compared to last year—the country is solidifying its position as an attractive destination for international investors.

Key Sectors and Regions:

• Equity capital inflows: $4.33 billion
• Wholesale and retail trade sector: $932 million
• Real estate investments: $2.2 billion

FDI Origins:

• European Union (EU): 52% of total investments
• Non-EU European countries: 18%
• Top investors: The Netherlands (19%), Germany (12%), and the United States (11%)

Türkiye has launched a new FDI strategy for 2024–2028 aimed at attracting high-value-added projects to accelerate economic growth. The government is targeting over $10 billion in FDI this year and aspires to increase its global FDI share from 1% to 1.5%.

Source: Agbi, November 17, 2024

E-Commerce: Türkiye on Track for Another Record-Breaking Year in 2024

The e-commerce sector in Türkiye continues to shatter records as the year comes to a close. With an estimated campaign volume of 500 billion TRY (~€13 billion) in November alone, expectations are soaring. This represents a growth of over 110% compared to the same period last year.

Key Figures:

• TRY 1.3 trillion (~€35 billion): Projected revenue for Q4 2024.
• TRY 3.4 trillion (~€91 billion): Total estimated e-commerce volume for 2024, reflecting nearly 100% annual growth.
• 3 billion orders: Expected in Q4, driven by an expanding customer base and new platforms entering the market.

In 2023, Türkiye’s e-commerce sector had already reached TRY 1.85 trillion (~€71 billion), posting an impressive 115.15% growth compared to the previous year. November campaigns now extend throughout the month to ease logistical pressures and enhance the consumer experience. This strategy has reshaped shopping habits, with a growing trend toward planned purchases. The average consumer basket size in November is projected to increase from 508 TRY in 2023 to 800–900 TRY this year.

These impressive figures highlight the continued expansion of e-commerce in Türkiye and its vital role in the national economy.

Source: Ekonomi Gazetesi, November 12, 2024

Türkiye Accelerates Its Path Toward Carbon Neutrality

Türkiye has taken a significant step toward its climate goals with the launch of the Türkiye Industrial Decarbonisation Investment Platform (TIDIP). This pioneering initiative is supported by the European Bank for Reconstruction and Development (EBRD), the World Bank Group, and the International Finance Corporation (IFC).

Key Objectives:

• $5 billion in investments by 2030: targeting annual reductions of over 20 million tons of CO₂ emissions.
• Focus areas: decarbonization of energy-intensive industries, including steel, aluminum, cement, and fertilizers, with planned expansion into sectors such as glass and chemicals.

Presented as the world’s largest industrial decarbonization program to date, the platform is guided by Low-Carbon Pathways (LCP). These roadmaps, developed by the EBRD in collaboration with Türkiye’s Ministry of Industry and Technology, aim to assist companies in adopting sustainable production practices through advanced technologies, tailored policies, and appropriate financing.

The implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) underscores the urgency for Turkish exporters to decarbonize their processes to maintain competitiveness in international markets. Notably, nearly 50% of Türkiye’s exports are destined for the EU.

EBRD President Odile Renaud-Basso emphasized:

"The partnership between public and private sectors, under strong national leadership, accelerates progress toward ambitious climate goals."

The EBRD is a major investor in Türkiye, having committed over €21.1 billion through 461 projects and trade financing lines since 2009, with a primary focus on the private sector.

Source: EBRD, November 25, 2024

Game District Acquires Turkish Gleam Games

Game District, a leading South-East Asian game studio with over 2 billion downloads and 7 million daily active users, is expanding its reach by acquiring a majority stake in the Turkish company, Gleam Games. Known for its hit game EverBlast, Gleam Games has established itself as a key player in the casual gaming market, thanks to its expertise in innovation and technological development.

A prominent player in the MENA region, Game District is renowned for its innovative approach to mobile game development and publishing, and its prestigious collaborations with international brands such as the NFL. Gleam Games, founded by visionary entrepreneurs, has distinguished itself through its advanced use of artificial intelligence and data tools, allowing the creation of immersive and dynamic gaming experiences.

Saad Hameed, CEO of Game District, stated:

"This acquisition marks a pivotal moment in setting new standards in the gaming industry. With Gleam Games, we are paving the way for a new era of innovation and creativity."

Eser Yoğurtcu, CEO of Gleam Games, will join Game District as Chief Strategy Officer (CSO). Having played a key role at Peak Games before its $1.8 billion acquisition by Zynga, Yoğurtcu will bring his expertise and entrepreneurial spirit to strengthen the global impact of the group.

This strategic acquisition is set to boost the gaming ecosystem in Türkiye and Europe, positioning both companies as leaders of innovation in the sector.

Source: Dünya, November 20, 2024

Master Builders Enters the Turkish Market

Master Builders Solutions, a global leader in construction chemicals, has acquired a 51% majority stake in the Turkish company MBT Teknik Yapı Kimyasalları. The current founders and shareholders will retain a 49% stake, ensuring the continuity of local expertise. This strategic acquisition, pending approval from the Competition Authority, is part of the shared vision between the two companies to transform the construction sector in Türkiye.

For MBT Teknik, a well-known Turkish company in the construction chemicals sector, this partnership with a global player represents a unique opportunity to strengthen its position internationally.

Founded in 1909 in Mannheim, Germany, Master Builders Solutions now operates 36 facilities worldwide and employs over 1,600 people. With nearly EUR 1 billion in revenue in 2023, Master Builders Solutions views this acquisition as a key lever to accelerate its growth in the rapidly expanding Turkish market. Boris Gorella, CEO of Master Builders Solutions, expressed his satisfaction with the entry into the Turkish market, stating that it represents a strategic asset for the company’s growth ambitions. This partnership is not only a geographical expansion but also a driver of innovation for the sector, offering significant growth prospects and further solidifying Türkiye’s role in Master Builders Solutions’ global strategy.

Source: Haberler.com, November 5, 2024

Türkiye: Opportunities in Organized Agricultural Zones

The Turkish Ministry of Agriculture and Forestry has launched an Investment Guide aimed at entrepreneurs wishing to develop projects in agricultural production areas. These Organized Agricultural Zones (ZAO) are designed to meet the growing demand for sustainable, high-yield, and environmentally friendly production, offering significant investment opportunities:

• Extensive network: currently, 61 ZAO projects across 42 provinces in Türkiye are under development. Of these, 21 zones are dedicated to crop production (including geothermal greenhouses), 21 to livestock farming, and 1 zone is focused on aquaculture.
• Renewable energy: cutting-edge infrastructure integrating renewable energy sources (solar, wind, geothermal, biomass) is already operational, with flagship projects such as the Balıkesir-Gönen OPA, home to the world’s largest geothermal greenhouse.
• Substantial financial support: significant funding is available for strategic agricultural projects, including grants up to 14 million TRY (50% subsidy) and up to 500,000 EUR in IPARD funding (60-70% subsidy). Additionally, low-interest loans (0% for some initiatives) are offered to support greenhouse production.

Additional Benefits:

• Tax exemptions: ZAO land and infrastructure benefit from VAT exemptions, property tax exemptions, and reductions in costs for water, gas, and communication services.
• Advantages for small agricultural enterprises: up to 100% reduction on land transfers, depending on the socio-economic development of the regions, which can be converted into subsidies via credit relief.

In a context of increasing food security challenges, these organized agricultural zones offer rapid and cost-effective access to fresh produce for urban populations, reducing transport losses, lowering logistics costs, and improving product availability.

Source: Tarimorman.gov.tr, October 28, 2024

Agricultural Subsidies: 135 Billion TRY Budget

As part of the 2025 Presidential Annual Program, Türkiye has allocated a record budget of 135 billion TRY for agricultural subsidies, marking a significant increase of 47.5% compared to 2024 and 113.3% compared to 2023.

Key Points:

• Focus on targeted support: additional subsidies will mainly be directed towards fertilizers, certified seeds, and seedlings, as well as staple crops like wheat, barley, and legumes. The government's aim is to boost productivity and improve the quality of harvests, particularly for products critical to national food security.

• Budget allocation changes: the share of subsidies for area-based support and livestock has decreased to 24.1% and 20.1%, respectively. This reduction allows for increased "differentiated payments" for certain crops, such as wheat and barley, with enhanced financial support based on price fluctuations, ensuring minimum profitability for producers.

• Increased purchase price support for cereals: to protect wheat and barley producers from price volatility, premiums per ton have been raised, with further increases expected in 2025. These premiums are designed to ensure a stable income for farmers and encourage sufficient production to meet national demand.

2026 outlook: in 2026, Türkiye will introduce a "base support" to gradually replace fuel and fertilizer subsidies. This unified model will streamline subsidy distribution processes and provide equitable support to all farms, regardless of size. The integrated approach demonstrates the government’s commitment to creating sustainable support tailored to the evolving agricultural sector.

Source: Ekonomim, October 31, 2024

Blue Tongue Disease: Suspension of Cattle Imports

In response to the rapid spread of blue tongue disease among cattle in several European countries, Türkiye has decided to suspend cattle imports, except from Poland and Hungary, where no cases have been detected.

Situation in Europe:

• Blue tongue disease has recently been observed in several countries, including the Netherlands, Denmark, Germany, and Italy.
• The rapid spread has prompted some countries to halt their cattle exports in an effort to contain the outbreak.

Measures Taken by Türkiye:

• Türkiye has suspended cattle imports from all European countries, except Poland and Hungary, which are currently allowed to continue exports.
• Turkish farmers, who had received import permits or made down payments, must now wait for rigorous sanitary tests to be conducted.

Experts’ Recommendations:

• Experts are urging for enhanced biosecurity measures on farms to limit the spread of the disease.
• While Poland and Hungary remain unaffected, they are under intensive testing, which may allow for the resumption of trade in the near future.

Source: Haberler, October 26, 2024