The Turkish economy will record the fastest growth in Europe between 2011 and 2015, according to a report compiled by global commercial real estate services company Jones Lang LaSalle.
Jones Lang LaSalle released its Turkey Real Estate Overview report for the third quarter of 2011 on Monday, assessing the current developments in the Turkish economy with analyses focusing on separate sectors. The report’s economic growth forecast covers the years 2011, 2012, 2013 and 2014.
Recalling that Turkey was the world’s fastest growing economy in the first quarter of this year with 8.9 percent over the same period of 2010, the report said the latest indices indicated a slowdown in Turkish growth; however, the EU candidate will maintain the momentum to see the fastest growth in its gross domestic product (GDP) among European economies during the years 2011, 2012, 2013 and 2014.
A recently introduced government mid-term economic program (OVP) expects Turkey’s economic growth to stabilize at an average 5 percent by 2012. The report said it was encouraging that the International Monetary Fund (IMF) has calculated that the share of Turkey’s budget deficit in its GDP will decrease to 10.3 percent by the end of this year and to 7.2 percent by the end of 2012.
“Turkey has a positive outlook regarding the international credit ratings in the long term,” the report said, recalling that Standard & Poor’s (S&P) had earlier increased the country’s credit rating to investment grade (BB-). Observers argued that this will help improve the global investor sentiment for new investments in Turkish markets while other credit rating agencies can be expected to increase the country’s rating.
The report agrees with this and says more foreign investors could be expected to bring their money to Turkish markets. “Risks concerning investments in Turkey will be minimized significantly in the near future, thus closing the gap between the investment atmosphere in Turkey and the desired investment conditions in developed markets. … [The] Turkish investment market needs to overcome certain structural problems; however, demand for investments in the country remains high.”
This increase in credit rating, the report argued, supports the government’s targets for economic growth and will have a positive psychological impact to boost confidence in the markets. The latest moves by the Central Bank of Turkey are expected to provide $3 billion extra liquidity to markets, the report said, adding that the bank is expected to take proactive measures to minimize the negative affects of a possible liquidity crisis in global markets on domestic markets. The report also said the government currently works on new legislative regulation aimed at creating new job opportunities in Turkey. The regulation that the report mentions is the government initiative to decrease the average weekly work hours so that the extra hours open up new jobs in both public and private institutions.
Turkey’s unemployment rate declined to 9.2 percent in June, representing a 1.2 percent decline compared to the same month a year ago. The report also recalled that Turkey was listed among the countries with the highest number of jobs created in the past three years in earlier Organization for Economic Cooperation and Development (OECD) and International Labour Organization (ILO) reports. In another indicator of economic stability, the report predicts that consumer confidence will remain above 90 percentage points through the end of this year. Data from the Turkish Statistics Institute (TurkStat) showed Turkey’s consumer confidence reached 96.4 percent in June and fell to 91.7 percent in August following a significant loss of value of the Turkish lira (TL) against foreign currency.
In regard to developments in sub-groups — sectors that affect the general economic outlook the most — the report said they did not expect a strong increase in prices in retail and real estate markets considering the devaluation of the lira. The report expects, however, the demand in retail markets to rise considerably through the end of the year. The Turkish logistics market is developing, albeit slowly, and this will help the increase in demand for relatively higher quality products. Turkey will continue to be a highly popular tourist destination, the report says, recalling that İstanbul, the country’s cultural tourism hub, was the fastest growing tourism market among cities in the Europe, Middle East and Africa (EMEA) region.
31 October 2011, Monday / TODAY’S ZAMAN, İSTANBUL