Foreign Direct Investment pestel analysis of Turkey

Economic factors affecting Turkey

Turkey is a major emerging economy and a key regional power. It is a member of the MINT block. The term ‘MINT’, coined by famous British economist Jim O’Neill, stands for Mexico, Indonesia, Nigeria and Turkey. Turkish GDP in 2018 was $769 billion and the GDP per capita for the same year was $ 9,445 (World Bank, 2019). Turkey is currently an upper-middle-income country. This has been made possible particularly due to the impressive social and economic developments (increased employment and incomes) the country has been making since 2000.

• Turkey is a major emerging economy and a key regional power. It is a member of the MINT block. The term ‘MINT’, coined by famous British economist Jim O’Neill, stands for Mexico, Indonesia, Nigeria and Turkey. Turkish GDP in 2018 was $769 billion and the GDP per capita for the same year was $ 9,445 (World Bank, 2019). Turkey is currently an upper-middle-income country. This has been made possible particularly due to the impressive social and economic developments (increased employment and incomes) the country has been making since 2000.
• Turkey is one of the biggest exporters of a number of commodities. Its top exports are cars, gold, delivery trucks, vehicle parts, and jewellery. Other notable exports are knit T-shirts, raw iron bars, wheat flours, refined petroleum, and buses. Turkey’s top imports are gold, refined petroleum, cars, vehicle parts, scrap iron, broadcasting equipment, and coal briquettes (Trading Economics, 2019). Germany is the top export destination of Turkey, while China is the top import origin. Turkey is the EU’s 5th largest trading partner, both in exports and imports.

Impressive infrastructural developments, and strategic location have made Turkey one of the most attractive FDI (Foreign direct investment) destinations in Europe. The areas where FID is highly sought after are technology, textiles, health, education, public transport, telecommunications, shipbuilding, electronics, and biotechnologies. Overseas investments by Turkish companies have increased manifolds in the last decade as well. A lot of the country’s investments go to Eastern European countries such as Poland, Hungary, Romania and Serbia.
Companies in Turkey are charged taxes on net profits at a rate of %22 for the years 2018, 2019, and 2020 (PWC, 2019). The personal tax rates vary from 15% to 35%. People who earn less than 18,000 Turkish Iira a year are required to pay 15% tax, while 35% by those who earn over 148,000 Iira.