Turkey’s economy is one of the fastest growing markets in the world. In 2002, when the economy was at its lowest point, the Erdogan administration launched a policy of rigorous reforms, which led to strong developments in nearly every sector and remarkable improvements in Turkey’s economic situation. Since the introduction of the reforms, the budget deficit has been pushed back to around 2% of the GDP and the country’s burden of debts (36%) is well within the Maastricht criteria for EU countries. Many European finance ministers would be proud to be able to publish such figures for their countries
From a historical point of view, Turkey has always been a major crossroads between east and west and, to a certain extent, also between north and south. Thanks to its strategic position, Turkey has strong connections with Europe as well as with the Middle East, the Far East and North Africa. The economic reforms and stimulation measures have enabled Turkey to take full advantage of this favourable position.
Turkey’s welfare is increasing and, by consequence, so are the national spending figures. With an average age of 27, the country’s population is very young and therefore growing rapidly. Turkey is the only country in Europe that is not faced with the problem of ageing population. Its domestic market is becoming a more and more interesting selling area, also to foreign enterprises.
Also due to Turkey’s geographical position as a gateway to the Middle East, Asia and North Africa, its economic role is becoming increasingly important. Of old, Turkey is a nation of traders and progressive people, always looking for opportunities. Turkey’s excellent trading contacts with its many surrounding regions make it a major transit country for Western European enterprises.
The current Turkish government has formulated a number of ambitious goals for 2023, the year that the Republic will celebrate its first centennial anniversary.
Macro economic targets for 2023:
- A position in the world’s top 10 economies
- An increase in exports from $ 135 billon (2012) to $ 500 billion
- An increase in the GNP from $ 735 billion (2012) to $ 2,000 billion
Apart from the above ‘macro-macro’ targets, dozens of other targets for 2023 have been formulated at sector level, such as gaining a position among the world’s top10 of solar-powered economies, increasing the share of industrial final products with added value (as opposed to the large share that semi-manufactured goods have now), a growth of the balance of exports and increasing foreign investments.
The main incentives:
New subsidies for investment, in particular in those areas where Turkey wants to decrease its dependence on the import of raw materials and semi-manufactured goods which are vital to strategic sectors.
Regional policy: increased subsidies for investment in less developed areas.
Since 1 January 2012, local and foreign investors alike have equal rights to the subsidy programmes in the table below:
General Investment Subsidy Programme
Regional Investment Subsidy Programme
Large-scale Investment Subsidy Programme
Strategic Investment Subsidy Programme
Customs duties exemption
Social Insurance Premium Support
Income tax deduction allowance *
Social Insurance Premium Support
Interest payment support **
VAT refund ***
* Provided the investment is made in Region 6.
** Provided the investment is made in Region 3, 4, 5 or 6 and within the framework of
the Regional Investment Subsidies Programme.
*** Provided the investment is made within the framework of the Strategic Investment Subsidies Programme, with a fixed minimum investment of TRY 500 million.