PMR Research is a specialised custom market research unit of PMR Ltd., a British-American company based in Poland. We offer a wide range of research services in Central and Eastern Europe for companies interested in business over the countries in the region.

Research services provided by PMR Research in Turkey include:

• brand and company image studies
• research on customer preferences, their satisfaction and their purchasing habits
• product concept tests
• usage & attitude studies
• internet surveys
• quantitative surveys - telephone, CATI, face-to-face
• qualitative research - focus groups, IDIs
• industry analyses (comprehensive analyses of given market sectors performed using PMR's proprietary methodology PMR MarketInsight)
• preparation of databases
• fieldwork services

Why to invest?

EU candidate state 72 million people market Developed industry Developed infrastructure No communist or World War II history Stable political environment Cost effective skilled workforce In the Custom Union with the EU Access point to Europe, Middle East and the Black Sea basin Strong and long lasting economic links with Western countries The most Western culture country in the Middle East

Business and economical environment

An enormous market of 72 million people, Turkey is an EU candidate country. However, despite the fact that Turkey already has a custom union with the EU, has expressed a willingness to join the Union and has made significant efforts to reform its legal system in line with Union regulations, it is not likely to become a member state in the foreseeable future. Compared with the other countries of the CEE, it has no Communist past, has had a functioning market economy for a long time, and maintains strong links with Western countries through its NATO membership. The country’s entrepreneurial culture has produced an economy with a wide variety of industries as well as active domestic players, meaning that investors will find a strong base of suppliers there. Key sectors which make Turkey an interesting investment target include automotive, chemical and pharmaceutical, ICT, electronics and electrical appliances manufacturing, machine manufacturing and metal working industries. Located between Europe and Asia, with easy access to the Black Sea, Mediterranean, Middle East and Balkans and with a developed infrastructure, it offers appealing locations for logistics companies. Turkey is increasingly adopting Western culture, which has brought down cultural barriers while starting operations. The drawbacks of Turkey as an investment destination are political problems with national minorities, the shifting balance of power between the secular army and ruling political party working within the rules of Islam, currency risk and strong local competition in certain areas. However, the incentives offered to investors include such aid as tax reliefs, sponsoring of social contributions, free land allocation, R&D support and a network of technology development zones. The corporate income tax rate is 20%, which, whilst being relatively high compared to CEE neighbours, is still attractive when compared with Western Europe.
In recent years Turkey’s GDP has experienced growth rates of 6.9% and 4.7% - in 2006 and 2007, respectively.  This, however, was followed by a massive decrease in growth - to a mere 1.1% in 2008. The Turkish economy is forecast to shrink in 2009 by 3.2%, although this trend is expected to witness a reverse in 2010 and the domestic economy should then grow by 1.4%. Compared with the other countries of the non-Gulf Middle East and Balkans Turkey has a relatively high level of GDP per capita, recorded as EUR 6.97 k in 2008 (a surge from the level of EUR 6.02 k in 2006), but 2009’s shrinking economy will bring it down to a level of EUR 6.22 k (the forecasts assume EUR 6.6 k for 2010). The financial crisis is not the only reason why the GDP per capita is set to decrease. Turkey has a rapidly growing population: estimated at 69.7m people in 2006, two years later, in 2008, it hit 71.5m (an increase of 2.6%) and is expected to reach 73.4m by 2010 (representing a surge of 5.3% compared with the 2006 base).
Turkey has become a manufacturing base for various companies targeting not only the huge domestic market but also Southern and Eastern Europe, the Mediterranean and the Middle East. Turkish exports grew y-o-y by 6.6% in 2006, 7.3% in 2007 and 2% in 2008. However, as the demand on the European markets decreases due to economic difficulties Turkish exports are forecast to fall by 10% in 2009, with a partial recovery in 2010, with a forecast surge of 6%.
Turkey has for years been infamous for its high inflation rate, reaching as high as 121% in June 2003.  However, the country has recently managed to curb this problem with CPI amounting to 9.6% in 2006, 8.8% in 2007 and 10.5% in 2008. The forecasts for 2009 and 2010 are 6.4% and 6.3%, respectively. As inflation impacted upon the Turkish currency, the Lira was denominated in 2005, at 1 new Lira to 1 mn old Liras. The old banknotes remain valid until the end of 2008 and are only now redeemable at the Central Bank until 2014.
 In terms of corruption its perception in 2008 has been recorded by Transparency International at the level of 4.6 (CPI – Corruption Perception Index), being an improvement over the 4.1 recorded in the previous year (the same level as had been recorded the year before that). However, compared with the other countries in the ranking Turkey’s ranking improved in 2008 by 6 points, to 58th position, with the same values being achieved by Poland and Lithuania.  These scores were themselves only slightly below those of Greece and Italy (4.7 and 4.8 in 2008 respectively).
 
The unemployment rate in Turkey reached 10.7% in 2008 (an increase from 9.9% in 2007), while in 2009 it is forecast to reach 12.5%. In 2010 the number of those registered as unemployed is expected to increase slightly to 11.5%.
 The average Turkish salary was recorded as EUR 943 in 2008 (4% up from EUR 907 in 2007) although it is forecast to fall by 7.4% in 2009 to EUR 873.
 
 
 Within the most attractive sectors of the Turkish economy the following might be mentioned:

• Automotive
• Chemical industry
• Pharmaceutical industry
• Electronics and electrical industry
• ICT industry
• Distribution and logistics
• Machine manufacturing
• Metal working 

Social environment

The population of Turkey as of 2008 was 71.5 million inhabitants, which would made it the second biggest country of the EU (after Germany) by population if it were to join the Union. Turkey’s population is very young compared with other European countries, the average age recorded in 2009 being 27.7 (27.4 and 28.1 for men and women, respectively). Despite the fast pace of population growth Turkey still has a very high death at birth rate, reaching 25.78 (per 1,000 births), placing it way below the developed countries.
While 99.8% of Turkey’s citizens are Muslims the country has a strong Kurdish minority, amounting to 20% of the whole population. 

Infrastructure and technological environment

Turkey maintains a well-developed R&D base with a big number of the universities, institutes and private R&D units. The country has a clear and developed policy towards attracting investors to set up these sorts of operations and provides the necessary help and assistance, including tax and social insurance relief. Recently such players as Bosch or Coca-Cola have decided to set up their R&D centres in Turkey following in the steps of many predecessors (including Marcedes, Unilever or HP) that decided to capitalize on the country’s offerings in this area.
 One of Turkey’s economic issues is the rapid increase in electricity consumption, rising by 7.2% p.a. on average for the last two decades. The majority of domestic energy consumption comes from oil (37%), followed by natural gas (23%), coal (27% incl. 11% from burning lignite) and renewable sources (13%). With its majority of oil and gas imported Turkey faces an emerging electricity supply gap which is due to be tackled through both sector reform and investments (including those in increases in energy efficiency). The government plans to construct up to three nuclear power plants of 5,000 MW by 2020, with possible support coming from Russia.
Nearly 39% of Turkey’s inhabitants had access to the internet in December 2007.  This was one of the highest levels recorded in the region. Mobile phone usage reached 84% by the end of 2007 and is expected to reach 100% in 2009.

 Turkey’s transportation network consists of 8,697 km of railways (1,920 km of which are electrified) and 64,000 km of roads. The country has an extensive network of motorways and expressways - 2,000 km of high quality roads altogether - connecting nearly all the country’s major cities. There are 90 airports with paved runways, of which seven are international, located in Adana, Ankara, Antalya, Dalaman, Istanbul, Izmir and Trabzon. It should be emphasized that Turkey also has a well-developed infrastructure construction industry of its own.
 Turkey is also an important place on the map of world oil and gas transportation, as a large part of those resources extracted from the Black and Caspian Sea basins is transported either by sea vessels over the Bosfor or via pipelines (Baku-Tbilisi-Ceyhan, Iran-Turkey and other).

Political environment

Turkey is a parliamentary democracy, following the clear division of state and religion which has its origins in 1923 and the creation of the modern Turkish state in the republican form. The head of state is the President, elected by Parliament for a five-year term (previously a seven-year term). Executive power is vested in the Prime Minister and the government, while the legislative power is in the hands of the unicameral parliament, consisting of 550 MPs. Universal suffrage was granted in 1933 and all Turkish citizens over 18 are eligible to cast their votes in Parliamentary elections. The next parliamentary and presidential elections are expected in 2013
 Turkey applied for membership of the European Union in 1987 after having been an associate member since 1963. The country has been recognized as a candidate for full membership in 1999 and negotiations began in 2005. Turkey’s accession is a contentious issue of political discussion within the EU countries.  Despite both its social and economic development, it remains a relatively poor country, has huge unsolved internal (its policy towards the Kurdish minority) and external (Cyprus) political problems and, last but not least, a different cultural background, despite having been very historically active in European politics, especially in the Balkans. It is expected that the negotiations process will be a lengthy one and that internal discussions within the EU on this subject will become more intense as the negotiations proceed.

Turkey is a member of all major international organizations. 

General data

Area: 780,580 sq km
Population: 71,5 mn (2008)
Capital city: Ankara
Language: Turkish, Kurdish
Ethnic groups: Turks (80%), Kurds (20%)
Land boundaries: Armenia (268 km), Azerbaijan (9 km), Bulgaria (240 km), Georgia (252 km), Greece (206 km), Iran (499 km), Iraq (352 km), Syria (822 km)

General economic data

	2006	2007	2008	2009f	2010f
GDP (EUR bn)	419.2	472.1	498.3	450.7	484.8
Population (mn)	69.7	70.6	71.5	72.4	73.4
GDP per capita (EUR)	6,018	6,688	6,968	6,222	6,609
GDP (constant prices y-o-y %)	6.9	4.7	1.1	-3.2	1.4
Exports, real, y-o-y (%)	6.6	7.3	2.6	-10.0	6.0
Imports, real, y-o-y (%)	6.9	10.7	-3.1	-13.0	6.5
CPI (average, y-o-y %)	9.6	8.8	10.5	6.4	6.3
Central bank reference rate	17.50	15.75	15.00	9.00	8.00
Monthly wage, nominal (EUR)	815	907	943	873	917
Unemployment rate (%)	9.9	9.9	10.7	12.5	11.5
Net FDI (EUR bn)	-0.6	-1.6	-1.8	-4.0	-3.0
FDI % GDP	16.1	16.1	12.3	9.2	10.5
FX reserves (EUR bn)	3.8	3.4	2.5	2.0	2.2
Exchange rate to USD AVG	46.2	48.4	50.2	44.4	42.3
Exchange rate to EUR AVG	1.44	1.30	1.30	1.67	1.59

Last update: Q2 2009 

Useful data

Currency: TRY
Time zone: GMT +2
Area code: +90


If you would like to find out more on Turkish market opportunities please do not hesitate to contact us directly:
phone: (48 12) 618 90 80
faks (48 12) 618 90 08
e-mail: [email protected]

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Turkey market reports
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Turkey market research
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