Made in Turkey Food Industry February 2022

FEBRUARY 2022 - SPECIAL EDITION
Turkey’s food industry growing
and exporting dynamically
Turkish agricultural
industry records exports
of over $29.5B
Turkey’s agricultural industry saw its exports rise
more than 20% and well exceeded $29 billion in
2021, marking an all-time high, according to
official data.
Agricultural foreign sales were up 22.2% to reach
nearly $29.74 billion, the data compiled from the
Turkish Exporters Assembly (TIM) showed.
The industry accounted for 13.2% of Turkey’s
overall exports last year, which had surged
by more than a third to hit an all-time high of
nearly $225.4 billion.
Cereals, pulses and oilseeds drove the industryrelated
sales with $9.15 billion, the data showed,
followed by furniture paper and forestry
products with nearly $7 billion, water products
and animal products with $3.4 billion, fresh
fruits and vegetables with over $3 billion and
hazelnut products with $2.26 billion.
Ornamental plants and products posted the
highest annual increase in exports last year
with over 39%, followed by water products and
animal products with 38.8%, furniture paper
and forestry products with 25.7% and cereals,
pulses and oilseeds with 25.6%.
Euro area annual consumer
inflation climbs to record
5.1% in January
Turkey’s food industry has recorded a steady
growth in recent years, with the Turkish
consumers becoming increasingly demanding,
driven by the multitude of choices offered by
mass grocery retail outlets. Rising disposable
income and changing consumption patterns,
along with the increase in the number of
persons in full-time employment, have all led
to an increase in interest as regards packaged
and processed food, such as ready-to-eat
meals and frozen food.
As the sector is getting more sophisticated,
Turkey is becoming one of the largest markets
for baked goods with its bread - an important
element of the Turkish diet - leading to some
of the highest rates of per capita consumption
in the world. On the other hand, subsector
dairy products including milk, yoghurt, cheese,
ayran (a drink made of yoghurt and water)
form an integral part of the traditional Turkish
diet. Traditionally, artesian, unpackaged
products have dominated the Turkish dairy
market, holding back widespread growth but
also posing a potential to the investors.
The food, beverage and tobacco industry
also has the highest share in household
consumption in Turkey, with about 27 percent
in recent years. The strengths of the industry
include the size of the market in relation to
the country’s young population, a dynamic
private sector economy, substantial tourism
income and a favorable climate.
The food and beverage industry contributes
to Turkey’s exports as well.
Turkey’s food and beverage industry has
been one of the most attractive areas for
foreign investors. It has attracted tremendous
amount of foreign direct investment (FDI),, as
it offers lucrative investment opportunities to
global investors.
To sum up:
-With its young and growing population, food
and beverage consumption and production
are both increasing in Turkey.
-The Turkish food industry has important
export opportunities due to the diverse
agricultural products available in the country.
-Being a developing country, the GDP per
capita is expected to increase in coming years,
which will also have the effect of increasing
consumer spending.
-An interested young population is open to
trying new brands and products.
-Growth in the tourism sector also benefits
consumption in the food and beverage
industry.
-Since the market is still not mature, there are
many opportunities for new products to enter
Turkey.
Besides, Turkey’s rapid transition from an
agricultural society to an industrial society,
the agriculture sector has been changing
and improving. Escalating urbanization and
employment play a decisive role on food
consumption. As the time spent at work and on
the road gets longer, the energy and duration
allocated to food preparation diminishes.
Consumers mostly opt for the most practical
and quickest solutions.
The food sector is so advanced by now that it
is possible to get chopped tomatoes, crushed
garlic, ready-made salad dressing and all kinds
of jam. And it is not only working people who
prefer such products. Quite a few others
choose them for their taste rather than their
practicality. Fruit and vegetable products, the
most important sub-sector of the food sector,
embodies heaps of products from canned
food to fruit juice, beverages and frozen
fruits-vegetables.
ANKARA – Euro area annual consumer
inflation climbed to a new record high of
5.1% in January, according to Eurostat figures
released Wednesday.
While the data came in line with market
expectation, annual inflation stood at 5% in
December 2021.
EU annual inflation rose to 5.6% in January,
up from 5.3% in December, the statistical
office of the EU said in its report.
On a monthly basis, inflation in euro area rose
0.3% in January, from the previous month,
while EU inflation increased 0.5% from
December.
The highest annual rates were recorded in
Lithuania at 12.3%, Estonia with 11% and
Czechia at 8.8%. The lowest annual rates were
seen in France with 3.3%, Portugal at 3.4%,
and Sweden with 3.9%.
In January, the highest contribution to the
annual euro area inflation rate came from
energy with 2.8 percentage points, the report
said.
Eurostat refers to inflation as the change in
the price level of consumer goods and services
during a given period.
Turkey offers significant investment
opportunities in agribusiness subsectors
As part of its targets set for the agriculture
sector by 2023 Turkey aims to be among
the top five overall producers globally
Home to the headwaters of the Tigris and
Euphrates Rivers, Turkey’s agricultural
sector today is echoing the prosperity of
Turkey’s organic
agricultural
products diversified
ancient Mesopotamia. With its favorable
geographical conditions and climate, large
arable lands, and abundant water supplies,
Turkey is considered to be one of the
leading countries in the world in the field
of agriculture and food.
Turkey has a robust agriculture and food
industry that employs almost 20 percent
of the country’s working population and
accounts for 6.1 percent of the country’s
GDP.
The strengths of the industry include the
size of the market in relation to the country’s
young population, a dynamic private sector
economy, substantial tourism income and a
favorable climate.
Turkey is the world’s 7th largest agricultural
producer overall, and is the world leader
in the production of dried figs, hazelnuts,
sultanas/raisins, and dried apricots. Page 3
Turkish traders aim to
reach $10B export target
with UAE
Global halal food market
prospers more than ever
The halal food market has
grown quickly over the past
decade, and is worth an
estimated $632 billion annually
on a global scale
According to a recent global
market research, Muslims
represent an estimated 25%
of the world’s population, with
around 1.6 billion consumers.
This large consumer market
presents several opportunities
for halal food products. Not
only is the Muslim population
growing, but Muslim
consumers are increasingly
better educated, with higher
household incomes, paving the
way for a worldwide demand
for mainstream products
and services that conform
to Islamic values. Halal food
is prepared following a set
of Islamic dietary laws and
regulations that determine
what is permissible, lawful and
clean. Page 3
Turkish factory output
beats forecasts to
jump 14.4%

2
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FEBRUARY
2022 - SPECIAL
EDITION
Turkey’s organic agricultural
products diversified
Commitment to export-led growth
Actually, Turkey has become a big potential supplier of various food products. It
is apparent that Turkey is to continue to develop her trade with world markets
as her products become known and preferred more and more in the future.
Trade between Turkey and the world markets must not be solely limited to
export and import business; foreign investment is always welcome to Turkey.
Joint ventures in Turkey and other countries are potential activities, which
are expected to be the major promoting tool for enhancing trade relations of
Turkey.
In general, sustaining the stable growth process, increasing employment,
securing the fiscal discipline, narrowing the current account deficit and as a
result, strengthening the economic stability are the major priorities of the
Turkish Government.
Commitment to sustainable economic policies since 2003 has placed the
Turkish economy in a good position to embark on a sustained path of growth.
Progress has been achieved in improving public finances, restructuring the
financial sector, improving the business environment and reforming the
public sector.
In addition, the reforms of the last decade, together with the strengthening
of the macroeconomic policy framework during that period, provide the
necessary foundations for Turkey to reach its goal of becoming a high-income
economy.
Turkey is an attractive location for foreign investment because of its emerging
role as a springboard for foreign companies coupled with joint ventures
initiated by Turkish partners.
The Government focuses on policies to increase private sector’s investments,
direct international investments and exports. Nevertheless, it is hard to keep
its competitive position in the world market full of emerging players. Thus,
manufacturers have shifted their operations to value-added products and
brand names more than ever. Currently, many of Turkish manufacturers have
their own designs and brands in international markets.
As known, Turkey, being the oldest of our publications, conveys the messages
of the Turkish exporters for years by participating in a series of international
fairs and exhibitions.
We wish Turkish business people and their foreign counterparts lucrative
trade.
Due to its rich plant variety, Turkey is one of the
countries best suited for organic cultivation. Today,
nearly 250 kinds of agricultural products are organically
produced efficiently.
Nowadays consumers are becoming increasingly
interested in environmentally sound products, as a
result of continuously expanding awareness. Thus, the
desire for healthy life has oriented consumers toward
healthy food and organic agricultural products. The
movement towards healthy food has started in 1960’s
in developed countries, spread all over the world. In
line with,
growing demand, organic
agricultural activities
began in Turkey in 1985
based on demand
of importing
countries. Due
to its rich plant
variety, Turkey
is one of
the countries
best suited
for organic
cultivation. Today,
nearly 250 kinds of
agricultural products
are organically produced
in Turkey and shipped
abroad pioneering with dried
fruits and nuts, olive and olive oil,
pulses and spices. Industrial products such as cotton,
textiles and essential oils have also be started to be
produced organically.
In the Turkish agricultural and food industry,
production is realized in conformity with all rules of
hygiene in order to produce high quality and sanitary
products. In this regard, many firms in Turkey have
started to apply internationally recognized quality
and food safety
systems like ISO 9000, ISO 22000, HACCP, BRC, IFS, SQF
or GLOBALGAP. This enables the Turkish food industry
to export to all countries in the world. In addition,
the similarity of consumers’ preferences with Moslem
countries and the geographic and cultural proximity to
many European markets
allow Turkish food exporters to penetrate international
markets easily.
However, the Turkish agriculture and food industry
export potential is not limited with these
products. There are many other
products that are worth
experiencing and these
are recommended to
all consumers in the
world.
From all of the
described products
above, it can be
easily seen that
Turkey has become
a big potential
supplier of various
agricultural and food
products. It is apparent
that Turkey is likely to
continue to develop her trade
with world markets as her products
become known and preferred more and more
in the future. In the meantime, trade between Turkey
and the world markets must not be solely limited to
export and import business; foreign investment is
always welcome to Turkey. Joint ventures in Turkey
and other countries are potential activities, which are
expected to be the major promoting tool for enhancing
trade relations of Turkey.
Erdoğan’s Africa visits to bolster agricultural
sector’s business, exports
President Recep Tayyip Erdoğan’s visits to Senegal and the
Democratic Republic of Congo (DRC) are expected to contribute
to the opening of new markets for Turkish companies operating
in the agricultural sector and to increase the trade volume in
this field.
Initially, agreements, such as Cooperation Agreement in the
Field of Vegetables and Fruit Exports, Cooperation Agreement
in the Field of Export of Peanut Products and Memorandum of
Understanding on the Supply of Motor Agricultural Equipment
were signed between Turkey and Senegal, during the visit,
according to a report by the Anadolu Agency (AA) who cited the
Ministry of Agriculture and Forestry.
While there is no agreement foreseen with the DRC, it is
expected that cooperation, knowledge and experience sharing
on topics such as desertification, drought, combating forest fires
and pests, watershed management and wastewater treatment
will be on the agenda during the visit.
Nihat Uysallı, chairperson of the Central Anatolian Cereals,
Pulses, Oilseeds and Products Exporters’ Association (OAIB),
told AA that he finds Erdogan’s vision of opening to Africa very
important.
Uysallı pointed out that the national flag carrier Turkish Airlines
(THY) enables exporters to reach every point in Africa and that
this makes a great contribution to Turkey both politically and
economically.
“The import data of Senegal’s food products shows that Turkey
has a high potential as an exporter for legumes, semolina,
starch, inulin, palm oil, sugar products, cocoa preparations,
bakery products and yeast group,” he said.
Nejdat Sin, chairperson of the board of the Mediterranean Fresh
Fruit and Vegetable Exporters’ Association (AKIB), explained
that the Turkish fresh fruit and vegetable sector exports mostly
apples, carrots, radishes, grapes, tea, beans, dates and oranges
to Senegal. Sin said, “Senegal and KDC (DRC), which Erdoğan
visited within the scope of his Africa program, will make
significant contributions to the Turkish fresh fruit and vegetable
sector, which carries out intensive studies to increase market
diversity, to become more effective in the African continent.”
Sin emphasized that their products are similar in quality to
European countries at more competitive prices in the African
market, where mostly Italy, the Netherlands, Denmark, France,
the United Kingdom and Germany are dominant.
“The trade agreement to be signed with Senegal and the trade
diplomacy we will develop, for our fresh fruit and vegetable,
cereals and pulses, aquaculture and animal products sectors to
take a larger share in the African market, will be a meaningful
and driving force for our exports in terms of establishing new
export bridges in other countries in the west of the African
continent,” he stressed.
According to the data of the Turkish Exporters Assembly (TIM),
Turkey’s agricultural product exports to Senegal amounted to
$88.1 million in 2021 with an increase of approximately 30%
compared to the previous year, with the largest contributing
items being cereals, pulses, oilseeds with $59.7 million.
This was followed by the furniture, paper and forest products
with $20.4 million and aquaculture and animal products with
$5.9 million.
Exports of fruit and vegetable products, seen among the
top items on which an agreement is expected to take place,
amounted to $1.2 million and exports of fresh fruits and
vegetables amounted to $211,000 last year.
Turkey’s export of agricultural products to DRC was worth $27.6
million last year. In 2020, this figure was $34.7 million. Grains,
pulses, oilseeds and products took the biggest share in exports
with $16.7 million.
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3
Turkey offers significant investment
opportunities in agribusiness subsectors
Continued From Page 1
The country is also one of the leading honey producers in the world. The recent data
indicate that Turkey boasted production of 18.5 million tons of milk , making it the leading
milk and dairy producer in its region. The country also saw production totals of 35.3 million
tons of cereal crops, 30.3 million tons of vegetables, 18.9 million tons of fruit, 1.9 million
tons of poultry, and 1.2 million tons of red meat. In addition, Turkey has an estimated total
of 11,000 plant species, whereas the total number of species in Europe is 11,500.
This bountiful production allows Turkey to maintain a significantly positive trade balance
thanks to its position as one of the largest exporters of agricultural products in the
Eastern Europe, Middle East, and North Africa (EMENA) region. Globally, Turkey exported
1,781 kinds of agricultural products to more than 190 countries accounting for an export
volume of USD 26.9 billion.
Turkey is looking to position itself as the preferred option for being the regional
headquarters and supply center of top global players in the agricultural sector. To
encourage investment in the sector, Turkey offers a set of incentives for potential
agribusiness investors.
According to McKinsey and Co., Turkey offers significant investment opportunities in
agribusiness subsectors such as fruit and vegetable processing, animal feed, livestock,
poultry, dairy, functional food, fisheries, and enablers (in particular cold chain distribution,
greenhouses, irrigation, and fertilizer).
As part of its targets set for the agriculture sector by 2023 Turkey aims to be among the
top five overall producers globally.
Global halal food market prospers more than ever
Continued From Page 1
The halal food market has grown quickly over the
past decade, and is worth an estimated $632 billion
annually. As such, it represents close to 17% of the
entire global food industry. In order to conform to
Islamic standards; all Muslims must ensure that they
are only consuming halal approved food, drink and
medicine. The large population of Muslims adhering
to halal requirements has fuelled increased global
demand for halal products.
The global halal food market was not significantly
affected by the global financial recession. Major
growth in Asia has been driven by changing lifestyles
that allow for higher incomes. The largest contributors
to the halal market in Asia are Indonesia, China,
India, Malaysia and the Gulf Cooperation Council
(GCC) members, including the United Arab Emirates,
Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. These
countries have all seen substantial growth in the halal
food industry that is unlikely to be curbed in the near
future.
There is also strong potential for halal certified
products in non-majority Muslim markets, where
consumers are looking for safe and ethical products.
The increasing popularity of the halal market in Europe
is driven by Russia, France and the United Kingdom.
The halal market in these countries has continued
growing since 2004, albeit at a slower pace than Asian
markets. A major opportunity can be found in the
Australia/Oceania region, where the halal food market
saw growth of 33.3% in recent years.
The most promising halal markets span over a range
of different countries. As the largest populations of
Muslim’s are located in the Asia-Pacific region, both
majority and non-majority Muslim countries in this
region would have high demand for halal products.
However, markets in North Africa and the Middle East
are particularly lucrative markets, as several countries
have majority-Muslim populations. The halal food
industry is also growing in countries that have smaller
populations of Muslims, but that have food quality and
safety concerns, such as Australia, the United States
and European countries.
Key halal markets include Indonesia, United Arab
Emirates, Algeria, Saudi Arabia, Iraq, Morocco, Iran,
Malaysia, Egypt, Turkey, Tunisia, Kuwait, Jordan,
Lebanon, Yemen, Qatar, Bahrain, Syria, Oman and
Pakistan. Emerging halal markets with relatively
large Muslim populations include India (177 million
Muslims), China (23 million), Russia (16 million), the
Philippines (5 million), France (5 million), Germany (4
million) and the United Kingdom (3 million).
To sum up:
- 25% of the world’s population is Muslim, nearly 1.6
billion people.
-Food products prepared following a set of Islamic
dietary laws and regulations, which determine what
is permissible, lawful and clean, are classified as halal.
-The halal food market has grown quickly over the
past decade, and is worth an estimated $632 billion
annually on a global scale.
-Strong economic growth and rising per capita
incomes have fuelled demand for diversified halal
products, enabling higher consumption levels and
more opportunities for halal food producers.
-Halal consumption is not limited only to the Muslim
population; other consumer goods are seeking halal
food due to halal food’s excellent reputation for
healthy and safe food products, and the humane
treatment of animals.
Private Label and the Power of Sustainability
This year’s Online
Roundtable Conference will
examine the challenges,
the drivers and the
opportunities that retailers
and manufacturers face
in creating a sustainable
business as it touches every
aspect of the companies’
operations. From sourcing,
product composition and transport, to
processing, packaging, waste management
and store and warehouse design.
In two morning sessions we will look at the
drivers and barriers of making sustainable
choices. What is the role of the consumer?
How can companies turn the cost of change
into future success?
Boris Planer, Head of Consumer and Market
Insight at consumer trend forecaster WGSN,
will give insights in Consumer Attitudes
toward Sustainable Purchasing. Kevin Vyse,
Head of Technical at flexible packaging
company ProAmpac, has over 35 years of
experience in packaging and held previous
senior positions at Marks & Spencer and
Tesco. Kevin will hold a motivational
presentation on Net Zero and the Circular
Route to better packaging.
Maria Gustavsson and Emelie Hansson
of the leading Swedish retailer ICA will
present a case study on how sustainability
is applied in ICA’s private label innovation
and in the overall strategy
of the company. Under the
theme of The Purpose of
Sustainability, Marjan de Bock-
Smit, Co-CEO, ImpactBuying
bv, an expert on sustainability,
will show the importance
of a holistic approach of a
sustainability strategy in
retailing and manufacturing
and how partnerships and transparency will
create better profit in the presentation “The
opportunities of Sustainable products”.
Participants will also get a radical and
thought provoking view of the future and
how the global technological landscapes
constantly creates “never normals” by
futurist and renowned keynote speaker
Peter Hinssen. Lebensmittel Zeitung editor
Denise Klug will give an overview of today’s
drastically changed European online retail
landscape. In conclusion, a panel of industry
experts will wrap up the programme with
a discussion on the Power of Sustainability
in private label. The panel will share their
expert views and give key takeaways of the
two conference days.
PLMA’s 2022 online Roundtable conference
offers an ambitious agenda of topics for
retailers and suppliers alike. Go to www.
plmainternational.com to register for
PLMA’s 2022 online Roundtable Conference
today!
Turkiye Wins the WorldStar Student Silver Award!
Our students, who ranked in the 17th National
Packaging Design Student Competition
organized by the Packaging Manufacturers
Association (ASD) with the contribution
of Eurasia Packaging Istanbul Fair and in
cooperation with Reed TÜYAP, were awarded
different degrees in the WorldStar Student
2021 competition. In the competition 1 Silver
award, 2 Honorable Mention awards and 14
certificate awards were given to Turkish
projects and a total of 17 awards were given
to Turkiye.
WorldStar Student has been organized by
the World Packaging Organization (WPO)
since 2006, open to the participation of
students only. The National Packaging
Design Student Competition, which is the
only competition that allows students from
our country to participate in the WorldStar
Student Competition, is organized annually
by the Packaging Manufacturers Association
(ASD) with the contribution of Eurasia
Packaging Istanbul Fair, in cooperation with
Reed TÜYAP.

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Turkish traders aim to reach $10B export target with UAE
Turkish exporters hope to bring their trade figure
with the United Arab Emirates (UAE) to $10 billion as
commercial relations enter a new period following an
official visit to the Gulf country by President Recep
Tayyip Erdoğan.
Turkish Exporters Assembly (TIM) Chairperson Ismail
Gülle told Anadolu Agency (AA) that the visit to the
UAE was extremely productive.
“The agreements made in terms of export volume and
this extremely positive bridge established with the
business world, give us hope to bring the export figure
to $10 billion in a very short time,” he said.
Expressing that the UAE is an extremely important
country in terms of both trade and the region, Gülle
said that the visit of the trade delegation, made
simultaneously with President Erdoğan, gained
much greater traction after the recent
developments.
Gülle said they met with a very sincere
attitude in the UAE, adding that
businesspeople are interested in the
opportunities present in Turkey.
Gülle said the largest import item of
the UAE is gold and jewelry followed by
petrochemical products.
“Naturally, we see our chemical and
jewelry industry here as very lucky,” he
said.
Gülle stated that although the foreign
trade volume between the two countries
did not work out in Turkey’s favor in 2020,
this picture was reversed in 2021.
Turkey’s exports to the UAE rose from $2.6 billion in
2020 to $5.5 billion in 2021.
“This was a huge increase. At the same time, we had
imports of close to $6 billion from this country,” he
said.
He said that the UAE makes $245 billion worth of
imports from the world and buys a total of 1,275 types
of products, while Turkey sells 980 of those products
to the country.
“We can sell more products. I sincerely believe that
this will be achieved in a very short time with the
atmosphere we see in addition to the course of the
ties. We, as the business world, will carry out studies
that will make these relations more frequent and
productive,” Gülle explained
G-20 should boost tax, development aid
Turkey’s Treasury and Finance Minister
Nureddin Nebati, speaking at the G-20
Finance Ministers and Central Bank
Governors Meeting , called on G-20
members to continue providing capacitybuilding
support to developing countries
in taxation and development. The minister
attended the meeting online, which is
being held in Indonesia’s Jakarta this year.
“We support the comprehensive agenda
in the international tax field. We welcome
the intention of the Indonesian Presidency
to hold inclusive discussions for the
benefit of all countries,” Nebati said.
He referred the global tax reform as one
of the most important achievements of
the G-20 group.
“With this landmark success, the G-20
has once again proven its credibility
and strength. To fulfill its mandate as
a pioneering platform, the G-20 must
continue to move forward in a responsible
and fair manner,” the minister said.
In October last year, the finance ministers
of G-20 countries agreed on the historic
global tax reform that is to revamp the
way multinational companies are taxed
to make sure they pay their fair share
wherever they operate.
“Emphasizing that they have always
believed that it is very important to reach
a consensus on the international tax issue
in solving the challenges arising from the
digitalization of the economy,” Nebati
further stressed that they believe that the
support given by the G-20 to the Inclusive
Framework is very important for the
proper implementation of the results of
the tax declaration.
If G-20 members continue to provide
capacity-building support and technical
assistance to developing countries, “these
countries will be able to adapt to the new
international tax architecture in a timely
manner,” he said.
Nebati went on to say that, as G-20
members, “we must act in synergy to move
towards carbon-neutral economies, taking
into account the principle of ‘common
but differentiated responsibilities and
relative capabilities’ as well as national
circumstances.”
Europe’s medical tourism shifting to Turkiye
Turkiye provides medical services to 1.2M tourists coming from Europe, says
Ali Yakut, general manager of an Ankara-based health organization
ANKARA – Europe’s medical tourism is
shifting towards Turkiye, according to the
general manager of an Ankara-based health
organization.
Many cities in Turkiye provide medical tourism
for foreigners, led by tourism centers such as
Istanbul, Antalya and Ankara, said Ali Yakut,
general manager of healthineverywhere.com,
according to its press release.
prices and successful operation rates, on top
of its rich heritage as a cultural destination for
tourists. It provides medical services to around
1.2 million tourists that come from Europe.
Foreign tourists who come to Turkiye prefer
medical services the most in fields of aesthetic
surgeries, hair transplantation, heart surgery,
orthopaedics, oncology, dental health and in
vitro fertilization.
Consumers can choose appropriate health
services on the website, which shares
information about different services of leading
health institutions in Turkiye, he added.
The organization, in addition, provides support
for those who need accommodation, transfer
and translation requirements, he noted.
Global market size for medical tourism has
recently reached $100 billion annually, with
consumer spending estimated to average
$10,000 per person. They range from dental
health and hair transplantation to thermal spas
and aesthetic surgeries. Turkiye has come to the
forefront in medical tourism with competitive
Yakut said the number of British visitors coming
to Turkiye for medical tourism is increasing
every year, which rose from a few thousand in
2010 to tens of thousands today.
“Turkiye is one of the top 10 countries that
British citizens get medical treatment. As
the pandemic ends, combined with Turkiye’s
growing medical infrastructure and success in
hotels and hospitality, it will change this ranking
in a short period. Turkiye’s target is climbing to
the top 5. With the healthineverywhere.com
platform, we want to increase the medical
tourism potential between the two countries,”
he said.

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5
Tourism in Turkey hopeful over recovery to pre-pandemic levels
This year’s season is set to take Turkey’s tourism
industry back to pre-pandemic levels, according to
industry officials, with high hopes that come amid
risks such as an escalation in tensions between
Ukraine and Russia, which are among its most
important tourist markets.
Hotel and tourism officials also warned of soaring
costs and sharp increases in utilities, food and
wage costs, which could limit profits and broader
benefits for an economy that is facing inflation that
soared to a 20-year high in January.
The rebound after long setbacks caused by the
pandemic that halted travel is seen as boosting the
economy, along with the help of a recent decline in
the Turkish lira that has made the country a more
attractive destination than ever.
The high season starts in May for Turkey’s
Mediterranean and Aegean beaches and historic
treasures.
Europeans especially are already booking trips,
good news for President Recep Tayyip Erdoğan’s
government, which has adopted a new economic
policy relying heavily on foreign income to curb the
current account deficit.
“Early bookings started with high speed. We’ve got
strong bookings, especially from Britain. They’re
almost in line with 2019,” said Turkish Hoteliers
Federation (TÜROFED) vice chair Bülent Bülbüloğlu.
He said early bookings traditionally start with
Britons and are taken as a reference for the season,
with strong demand also expected from other
European countries, Russia and Central Asia.
Foreign arrivals in Antalya, among Turkey’s most
popular holiday destinations, totaled 117,818 in
January, matching 2019 levels, data showed.
But a further escalation of the Russia-Ukraine crisis
may pose some risk for the season, Bülbüloğlu told
Reuters.
“We get good signals from Germany, Belgium,
Netherlands and the Scandinavian market too ...
Turkey has become a destination where visitors can
have the most affordable holidays with their own
currencies. It is now a paradise for foreigners.”
The lira has been broadly stable since the start of
the year following a 44% decline in 2021 and allinclusive
deals make Turkey even cheaper.
“A five-star hotel’s average price per night is around
70 euros in Turkey, whereas it is around 200 euros in
Spain,” said Turkish Tourism Investors’ Association
(TTYD) Chairperson Oya Narin.
Finance Minister Nureddin Nebati forecast tourism
revenues of $34.5 billion this year. The revenues
doubled to almost $25 billion last year, reflecting
a recovery from the initial wave of COVID-19
pandemic measures in 2020. They were $34.5 billion
in 2019, prior to the outbreak of the pandemic.
The number of visitors, including Turkish nationals
living abroad, jumped more than 88% to over
30 million in 2021, according to the Culture and
Tourism Ministry data.
Erdoğan’s new economic policy aims to cut inflation
by recording a current account surplus, with tourism
revenues a key factor.
“It seems we will achieve the $34-$35 billion
target,” said Narin. “But revenues are not enough
themselves. There is also the costs angle.”
She said foreign arrivals will be near 2019 levels, or
just 10% below, but making a profit matters more
to the industry than how many millions come.
“We have serious problems with the course of
our costs. We are facing rampant cost increases
regarding electricity, gas and other costs,” Narin
said.
Official data for January showed consumer
prices rose by 48.69% annually. The government
has pledged to act and vowed to safeguard
households against soaring prices.
Ülkay Atmaca, general manager of Innvista Hotel
Belek in Antalya and head of Professional Hotel
Managers Association (POYD), said he had to
increase prices by 42% for this season but still
cannot compensate for the rising costs.
Hotel Association of Turkey (TÜROB) Head
Muberra Eresin said sharp cost increases were
eroding industry margins, with costs rising 60%-
65% in just one month.
“We have already signed contracts with operators
and set our prices. It’s not possible to reflect all
these additional costs on our prices now,” she
said.
Turkiye backs G20’s
agenda on int’l taxation
Turkiye voiced support for the G20’s
efforts on international taxation, urging
members to help build the capacity of
developing countries to comply with new
international tax architecture.
In a written statement, Turkish Treasury
and Finance Minister Nureddin Nebati
said international taxation was one of the
areas in which the G20 had shown the
most success.
“We’ve always believed that reaching
consensus on the solution for challenges
arising from the digitalization of the
economy is crucial, said Nebati.
He added that though Ankara has
concerns regarding the first part of an
international two-pillar solution to tackle
the tax challenges stemming from an
increasingly globalized and digitized
economy, it “joined the consensus for the
sake of compromise.”
Under the first part of this plan, agreed
last year after a ministerial meeting
in London between Canada, France,
Germany, Italy, Japan, the UK, and
US, the largest and most profitable
multinational corporations will be
required to pay tax in the countries where
they operate and not just where they have
their headquarters.
The second part, dubbed Pillar Two,
involves a global minimum corporate tax
of at least 15% on a country-by-country
basis.
Underlining the significance of the G20’s
support for the plan, which is called the
Inclusive Framework on Base Erosion
and Profit Shifting, he said: “Designing
sound principles and clear rules is very
important. Therefore, we should provide
enough room to relevant working groups
in the Inclusive Framework for necessary
technical work.”

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EDITION
Turkey supports foreign firms as global supply crunch bites
and fashion and also yacht building
industry who search for new partners
in Turkey.”
Japanese electronics contractor Kaga
Electronics is going to build a factory
in Turkey, shifting a portion of the
production from China and Southeast
Asia, it also said back in December.
The company said it hopes to take
advantage of Turkey’s strategic
location and expand the Middle East
and Europe orders. “Kaga hopes to
leverage its new production base to
win orders related to auto-related
parts as well,” it said.
Soaring freight costs
It has become extremely expensive
to ship goods from Asia.
As a result of container shortages,
the cost of freight between China
and northern Europe has increased
ninefold since February 2020,
according to the Freightos Baltic
Index.
While a cargo ship can take weeks to
travel from Asia to Europe, Turkey is
only three days away by truck.
A study by the McKinsey consulting
group published in November placed
Turkey in the third position among
countries with the best potential
for textile supplies by 2025, behind
Bangladesh and Vietnam but ahead
of Indonesia and China.
“Apparel companies are also looking
to change their sourcing-country mix
... to secure the supply chain,” the
global report’s authors wrote.
The report said Turkey offers
“cheaper production costs due to a
declining lira.”
The lira has fallen by 44% against the
dollar since 2021.
Erdoğan has been endorsing a model
based on lower borrowing costs,
which he says will boost production,
employment and exports, and
also eventually help Turkey solve
its chronic current account deficit
problem and contribute to stabilizing
the Turkish lira. The declining lira
is, however, problematic for several
industries due to the country’s
dependence on imports for energy
and raw materials.
“It’s not like Russia, for example,
which has extensive raw materials,”
said Roger Kelly, leading regional
economist covering Turkey and
Russia at the European Bank for
Reconstruction and Development
(EBRD).
He said Turkey also faces competition
from countries within the European
Union.
“I don’t think we should ignore
those countries in southeast Europe
like Romania or Bulgaria, which are
actually in the EU – which helps them
to a certain degree – and also have
low production costs and strong
production bases as well.”
There is a silver lining to the global
supply chain crunch for Turkey: The
country is becoming an attractive
alternative at the gates of Europe for
foreign firms.
Turkey is seizing its geographic
advantage to woo companies as
the skyrocketing cost of sea freight
and pandemic-related disruptions
to supply chains push some
European companies to reduce their
dependence on Asia.
President Recep Tayyip Erdoğan has
promoted a new slogan for exports:
“Made in Turkiye,” marketing
products in Turkish instead of the
internationally known “Made in
Turkey.”
The country’s exports reached a
record $225.4 billion (TL 3.07 trillion)
last year, with a target of $300 billion
set for 2023.
“Many international companies are
taking action to supply more from
Turkey,” Burak Dağlıoğlu, head of the
presidency’s investment office, told
Agence France-Presse (AFP).
He said the country offers automakers
or textile companies a “competitive
talent pool, sophisticated industrial
competencies, well-developed
services industries, perfect
geographic location and state-of-theart
logistic infrastructure.”
Furniture retail company Ikea
announced last year it wanted to
move part of its production to Turkey.
The Italian clothing group Benetton
told AFP it wants to “increase its
production volumes in countries
closer to Europe, including Turkey.”
Peter Wolters, vice-chairperson of
the Netherlands-Turkey Chamber
of Commerce, said the business
group received “requests from the
household and garden sector, textile
Oil above $100 for first time
since 2014, gold hits 17-month high
Price of Brent crude oil climbs to highest since September 2014 amid
Russian military intervention in Ukraine
ANKARA – Oil prices climbed above $100 per
barrel for the first time since 2014, while gold hit
its highest level in 17 months as Russia’s military
intervention in Ukraine fuels risks related to
energy security and investors flock to precious
metals as a safe haven.
The price of Brent crude oil climbed to as high
as $102.23 per barrel on Thursday February
25, its highest since Sept. 5, 2014, according to
official figures.This was a 5.5% increase for the
international oil benchmark, which closed on
Wednesday at $96.84 per barrel. It was trading
at just below $100 per barrel at 1630 GMT.
American benchmark West Texas Intermediate
(WTI) saw its price climbing to $100.50 per barrel
during the day -- the highest since July 30, 2014.
WTI enjoyed daily gains of 9.1% at that point,
after ending the previous session at $92.10
a barrel. It later retreated to trade at $96.81
per barrel. With Russia’s military intervention
in Ukraine, natural gas prices in Europe also
jumped by around 30% in the EU. Europe buys
approximately 40% of its natural gas from
Russia.
Amid heightened geopolitical risks, investors
around the world flocked precious metals as
safe haven assets.
The price of gold climbed to $1,974.47 per
ounce on Thursday, its highest level since Sept.
1, 2020, and up 3.5% from Wednesday’s close of
$1,907.55.
It was trading at around $1,922 an ounce at
1640 GMT.
An ounce of silver reached $25.62 during the
day, marking its highest since Aug. 2, 2021, and
up 4.5% from the previous day’s close of $24.52.
It was trading at around $24.72 an ounce at the
time.

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Turkish factory output beats forecasts to jump 14.4%
Turkey’s industrial production jumped more
than expected in December and registered the
highest rate of growth in six months, official
data showed .
The output surged 14.4% year-over-year in
December, the Turkish Statistical Institute
(TurkStat) said, rising for the 18th consecutive
month in a sustained burst of economic activity
since the lifting of coronavirus measures.
The reading exceeded forecasts of 11.2%
and 10.8% projected in Reuters and Anadolu
Agency (AA) polls, respectively.
The production remained strong despite high
volatility in the Turkish lira that month, which
deterred company and household budgets and
sent inflation soaring via import prices.
Analysts expect jumps in utility prices and
scattered curbs to power use to weigh on
industrial production in January, after Iran had
cut gas flows to Turkey for up to 10 days due to
a technical failure.
While the mining and quarrying sector
posted negative results, the manufacturing
industry and the electricity, gas, steam and
air conditioning supply indices were on the
positive side, the data showed.
The mining and quarrying sector index dropped
1.4% year-over-year in December.
The manufacturing industry and the electricity,
gas, steam and air conditioning supply indices
were up 16.2% and 8%, respectively, over the
same period.
Enver Erkan, a chief economist at Istanbulbased
Tera Yatırım, said they expect a loss of
momentum in January.
“Iran’s cessation of gas supply and consequent
electricity and gas cuts in the industry led
to suppression of production. We take into
account that we will see the effect of this in
the January data. Due to supply problems, the
upward trend in raw material prices continues,”
Erkan said in a note.
In April of 2020, output plummeted more
than 31% in the face of the initial coronavirus
wave, but it has since made a strong recovery
since subsequent measures largely skirted the
manufacturing sector. All virus measures were
lifted in July last year.
Double-digit 2021 growth
Turkey’s economy is expected to have grown
around 10% in 2021, rebounding powerfully
after a sharp slowdown a year earlier driven by
COVID-19 restrictions.
Erkan said the latest data reaffirmed the
double-digit growth in 2021.
“Our growth expectation for 2021 is 10.8%.
In 2022, we will consider factors such as the
developments in the exchange rate, the
economic slowdown caused by the global
supply shortage, and the problems that the
omicron variant may cause, especially in our
export partners,” he said.
“We expect the growth to normalize towards
the 4% band this year.”
Month-over-month, industrial output rose
1.6% in December on a calendar and seasonally
adjusted basis, TurkStat said.
The mining and quarrying sector index
dropped by 3.4% month-over-month. The
manufacturing, and gas, steam and air
conditioning supply indices were up by 1.8%
and 0.6%, respectively, versus November.
The Turkish government has been endorsing a
model based on lower borrowing costs, which
it says will boost production, employment and
exports, and also eventually help Turkey solve
the chronic current account deficit problem
and contribute to stabilizing the Turkish lira.
To support the drive, Turkey’s central bank has
slashed its interest rates by 500 basis points
since September to 14%, before pausing the
easing cycle.
The lira had weakened 44% last year and
hit a record low of 18.4 against the United
States dollar in late December but rebounded
after President Recep Tayyip Erdoğan’s
announcement of a scheme to boost
lira deposits by protecting them against
depreciation.
The initiative had helped the lira rally sharply
to just over 10 and then settle at current levels
just under 14 to the dollar.
The decline in the lira stoked prices and caused
inflation to jump to 48.7% in January.
A central bank survey of market participants’
expectations showed consumer price inflation
was seen ending 2022 at 34.06%, up from
29.755 in the previous survey, with gross
domestic product (GDP) growth forecast to be
3.7%.
The lira, which has traded steadily so far this
year, was flat at 13.54 against the dollar. The
central bank survey showed it was seen ending
the year at 16.04, down from the previous
forecast of 16.13.
Separately, Turkey’s retail sales volume, a
marker of growing consumer spending, surged
15.5% year-over-year in December, TurkStat
data showed, with all sub-indices posting
increases.
Non-food (except automotive fuel) sales
increased by 28.2% in December, compared to
the same month in 2020. Automotive fuel sales
were up by 2.8%, while that of food, drinks
and tobacco increased by 1.7% over the same
period.
Among non-food items, textile, clothing and
footwear sales rose the most, climbing 77.3%
from December 2020, followed by medical
goods and cosmetics (16%) and computers,
books and telecommunications equipment
(13.1%). Sales by mail order and the internet
soared 34.1% year-over-year in December.
On a monthly basis, the retail sales volume
dropped by 2.7% over the month.
Separate TurkStat data showed that the
economy posted an 82.4% annual jump in total
turnover in December.
The biggest change came in industry, which
shot up 101.4% on an annual basis, the institute
said. The construction sector saw an annual rise
of 46.4%, while the services and trade indices
climbed by 82.9% and 77.6%, respectively.
On a monthly basis, the seasonally and
calendar-adjusted total turnover index was
up 12.8% in December. “Industry increased
by 20.1%, trade increased by 11.0%, services
increased by 7.6% and construction decreased
by 4.6% on monthly basis in December 2021,”
TurkStat said.

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9
Turkey makes $80B investment via
public-private partnership
Turkey’s assets abroad total $298.1B at 2021-end
Turkey has so far invested $80
billion (TL 1.08 trillion) through
257 public-private partnership
(PPP) projects, according to a
statement of the PPP Center of
Excellence (CoE).
PPP CoE head Eyüp Vural Aydın
told Anadolu Agency (AA) that
these projects have been used
effectively since the 1990s.
Aydın stated that the PPP projects
pass completely to the state after
a set timeframe and thus provide
important resources.
“For example, the third bridge
of Istanbul, Yavuz Sultan Selim
Bridge, has been in operation for
almost six years. Istanbul Airport
has been in operation for three
years and has an operational
period of 25 years. All these
projects are extremely important
and will return to the state at the
end of the day.”
Stating that one of the latest of
these projects, the 1915 Çanakkale
Bridge, is about to be completed
and will be put into service soon,
Aydın said it was completed in a
short period of four years.
Aydın stated that PPP projects
provide environmental, economic
and time-saving advantages
and that they can be completed
quickly without expense for the
public.
Aydın said, “We see that PPP
projects in Turkey contribute
to economic development, save
time for citizens and increase the
value of time in the country.”
Aydın noted that Turkey’s PPP
projects are shown as an example
abroad and that most recently,
senior bureaucrats from 42
countries from almost all over the
world came to the Istanbul PPP
Week, which they organized for
the sixth time in December.
He said that they talked about
successful projects such as
Istanbul Airport, city hospitals,
the Eurasia Tunnel and Yavuz
Sultan Selim Bridge.
Expressing that Central Asian
countries have especially warmed
up to Turkey’s city hospital
model, Aydın said that a hospital
project was started in Azerbaijan
last month and that Turkish
companies will take the lead in it,
while a hospital and an airport in
Kazakhstan were built by Turkish
companies.
He added that there will be good
news regarding Kyrgyzstan very
soon.
“Thanks to the experience of
Turkish companies, they have the
ability to undertake these projects
in many different countries and
regions all over the world,” he
said.
Aydın stated that all of the current
projects will be state-owned by
2040, noting that new investments
can be facilitated with the budgets
that will be obtained from the
current projects.
Turkey ended 2021 with external assets worth $298.1 billion (TL 4
trillion), down 16.6% from the end of 2020, according to data released
by the Central Bank of the Republic of Turkey (CBRT).
Liabilities against nonresidents fell 17.5% to $528.3 billion during the
same period.
The net international investment position (NIIP) – the difference
between external assets and liabilities – is a $230.2 billion deficit at
the end of December, versus $384.8 billion deficit at the end of 2020.
The NIIP, which can be either positive or negative, is the value of
overseas assets owned by a nation, minus the value of domestic assets
owned by foreigners, including overseas assets and liabilities held by a
nation’s government, the private sector, and its citizens.
Reserve assets, a sub-item under assets, jumped 19.2% to $111.2
billion, the data showed. Other investments, another sub-item under
assets, totaled $126.1 billion with a rise of 16.4% from the end of 2020.
“Currency and deposits of banks, one of the sub-items of other
investment, recorded $50.9 billion, indicating an increase of 21.5%
compared to the end of 2020,” the bank said.
On the liabilities side, direct investments-equity capital plus other
capital at the end of December 2021 amounted to $122.2 billion.
The figure was down 47% from the end of the previous year “with the
contribution of the changes in the market value and foreign exchange
rates,” the bank said.
The U.S. dollar/Turkish lira exchange rate was around 13 at the end of
2021, significantly higher than the figure of 7.35 at the end of 2020.
Nonresidents’ foreign exchange deposits were up by 4.1% to $34.7
billion, while Turkish lira deposits dropped by 38.3% to $9.7 billion.
The total external loan stock of banks amounted to $66.9 billion, down
6.5% from the end of 2020, while total external loan stock of other
sectors grew by 1% to $96.7 billion, according to the central bank.
Turkey lays out new amendments on converted lira deposits
Turkey introduced new amendments in the
scheme that protects local currency savings
against exchange rate volatility.
According to a decree published in the
Official Gazette, the country’s central bank
will determine the maximum interest rate
charged by banks on foreign currency and
gold deposit accounts converted to Turkish
lira under the scheme.
The program, announced by President Recep
Tayyip Erdoğan last month, aims to encourage
foreign currency holders to convert their
funds to lira and keep their savings in Turkish
money.
Under the “exchange rate-protected deposit”
system, the government guarantees it will
cover losses should the interest they receive
when the account matures be less than what
they would have earned by keeping the
savings in foreign currency.
The scheme was unveiled after the lira fell
to a record low of 18.4 to the United States
dollar on Dec. 20, before rallying sharply to
just over 10 and then settling at current levels
just under 14 to the U.S. currency.
Erdoğan maintains that the lira deposit system
is a success.
“We are pleased with the trust our citizens
have shown in the exchange rate-protected
deposits. We are pleased with the decrease
in volatility in exchange rates and continued
stability,” he said.
Since the announcement, the government
extended the program to corporate accounts.
The Central Bank of the Republic of Turkey
(CBRT) also said exporters would be required
to exchange 25% of their foreign currency
revenue into lira.
The volatility in the lira came after the
CBRT slashed its benchmark interest rate
by 500 basis points to 14% from 19% since
September. It halted the easing cycle and held
its policy rate steady last month.
Separately, the central bank also announced it
will issue rules allowing Turks resident abroad
to convert their foreign currency accounts
into special lira accounts with returns linked
to the value of foreign currency.

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Turkey rolls out strategic artificial intelligence road map
Turkey is drawing a road map for its
strategy in the field of artificial intelligence
(AI), which can be defined as the realization
of actions such as making decisions,
discovering meaning and learning
in dynamic environments specific to
intelligent products, by a computer or a
computer-controlled machine. Accordingly,
the Presidential Circular on the National
Artifici al Intelligence Strategy for 2021-
2025 was published in the Official Gazette.
The document was prepared by the
Presidency’s Digital Transformation Office
and the Industry and Technology Ministry in
line with the 11th Development Plan.
The country’s priorities in the field and the
steps to be taken were determined within
the framework of the “Digital Turkey” and
“National Technology Move” visions.
Digital Turkey aims for a globally
competitive Turkey with the increase in
productivity it provides by using digital
technology, products and services in its
social, economic and public activities and
the value it generates from data.
Aiming to develop the human and
infrastructure capacity of Turkey to
produce high-tech products nationally and
authentically, the National Technology
Move, meanwhile, aims to strengthen
economic and technological independence
and to implement policies and practices
that will lead to breakthroughs in critical
technologies.
President Recep Tayyip Erdoğan personally
wrote the preface of the National Artificial
Intelligence Strategy. Stating that systems
based on AI have a radical transformative
effect on production processes, daily life
and institutional structures, Erdoğan noted
that this brings humanity to the brink of a
new era.
“AI technologies, whose application area is
increasing, are expected to have a greater
impact on the global economic structure
than the internet revolution,” Erdoğan
emphasized. The president also mentioned
the founder of cybernetics, Ismail al-Jazari,
one of the great Muslim inventors and
engineers of the Islamic Golden Age, and
professor Cahit Arf, who took the first step
toward AI in Turkey.
“We believe that the time has come for our
country to make a breakthrough in the field
of AI,” Erdoğan also said, noting: “We have
the opportunity to add value to humanity as
a whole by making a new techno-economic
breakthrough blended with our deeprooted
civilization experience by designing
AI systems with an understanding that
includes the development and operation of
these systems per our common values.”
The National Artificial Intelligence
Strategy was designed around six strategic
priorities, namely “training AI specialists
and increasing employment in the field,”
“supporting research, entrepreneurship
and innovation,” “access to quality data
and technical infrastructure,” “making
arrangements to accelerate socioeconomic
adaptation,” “strengthening international
cooperation” and “structural and business
to accelerate the power transformation.”
The 2025 targets set in the strategy include
AI sector’s contribution to the gross
domestic product (GDP) to reach 5% while
employing at least 50,000 people.
International organizations will actively
contribute to the regulatory work and
standardization processes in the field of
cross-border data sharing with reliable and
responsible AI, according to the framework;
while it is aimed for Turkey to be among the
first 20 countries in the AI indices.
According to the strategy, it is expected
that the market size will increase twofold in
the next five years in global AI expenditures,
which amount to approximately $50 billion
(TL 426.41 billion). According to several
studies, AI will contribute around $13 trillion
to $15.7 trillion to the global economy by
2030 and will provide 13%-14% growth.
It is predicted that the data to be produced
in the next three years will be more than
the data produced in the last 30 years.
While the number of startups focused
on AI in the U.S. and China has reached
2,000, this number is around 200 in Turkey.
About half of the AI initiatives in Turkey are
located in technology parks – also known as
teknoparks – with 73% of those located in
Istanbul.
Efforts continue to make public institutions
in Turkey ready for new-generation
technologies and to have effective
decision-making processes based on data.
In this context, the Big Data and Artificial
Intelligence Applications Department
was established within the Presidency’s
Digital Transformation Office and the
National Technology General Directorate
was established under the Industry and
Technology Ministry.
The Scientific and Technological Research
Council of Turkey (TÜBITAK) Artificial
Intelligence Institute was also established
for the production of AI technology
solutions by bringing together the research
centers of universities and private sectors.
The Artificial Intelligence Strategy
is scheduled to be introduced to the
public during a ceremony to be held in
Turkey’s technology and innovation base,
Informatics Valley, on Aug. 24. The event
will be attended by Industry and Technology
Minister Mustafa Varank and the head
of the Presidency Digital Transformation
Office, Ali Taha Koç.
Companies to benefit
from lira incentives
The Turkish Central Bank has decided to provide incentive to domestic
legal persons holding deposits and participation funds in the event that
their foreign exchange and gold deposit accounts and participation
funds are converted into Turkish Lira time deposit accounts at the
account holder’s request.
“It was previously announced that domestic real persons holding
deposits and participation funds would be provided with incentive in
the event that they converted their FX and gold deposit accounts and
participation funds into TL time deposit accounts,” the bank said in a
written statement.
The bank decided to provide the same incentive also to domestic legal
persons under similar rules. Under the scheme, the government has
pledged to to pay the difference if the interest yield of lira savings is
below the FX yield in the same maturity period. The shortest maturity
period for real persons is three months. However, maturity periods
will be six months or one year for legal persons.

FEBRUARY
2022 - SPECIAL
EDITION
Economic Newspaper
Please mention
“Made in Türkiye” when writing to advertisers
11
2021 witnessed records and challenges for Turkish economy
For better or for worse, Turkey is leaving
behind a year that harbored economic
highs and lows, from records in exports
and stock markets to the dual challenge
of soaring inflation and slide in the
Turkish lira.
Among the breakthroughs in 2021 was
the government’s decision to double
down on an economic policy unveiled in
the last quarter, one that aims for a low
current account deficit and high growth
rate through investment, production,
employment and exports, instead of
steeper interest rates.
The country has put forward
comprehensive measures to offset the
impact of the COVID-19 pandemic but
has also dealt with a steep slide in the
lira’s value, which it managed to reign
into some extent.
The lira had fallen to an all-time low
of 18.40 per U.S. dollar on Dec. 20,
before recording a historic rebound
after President Recep Tayyip Erdoğan
announced a new scheme to protect lira
deposits against currency volatility.
The depreciation in the lira made
imports more expensive and followed a
series of interest rate cuts, as the Central
Bank of the Republic of Turkey (CBRT)
slashed its key policy rates by 500 basis
points to 14% since September.
Helping the national currency to rapidly
regain some ground lost over the course
of 2021, the scheme was designed to
make citizens feel safer about holding
their savings in the bank.
It effectively ties the value of special
new deposits to the U.S. dollar by
promising to compensate for losses
incurred from swings in the exchange
rate. The measure had reversed the
lira slide and triggered a historic 50%
surge in the currency’s value in the
week through Dec. 24. The currency
had strengthened as much as below
11 per U.S. dollar in December but still
remained weaker than the 7.44 at the
start of the year.
Citing “unhealthy price formations,”
the central bank announced five direct
interventions to support the lira earlier
in December, including more than $2
billion (TL 26.7 billion) in the first three
efforts.
Erdoğan called on citizens to keep
all their savings in lira and shift gold
savings into banks, saying the recent
exchange market volatility was largely
under control.
“I want all my citizens to keep their
savings in our own money, to run all their
business with our own money,” Erdoğan
told a meeting with businesspeople in
Istanbul.
“Let’s not forget this: As long as we don’t
take our own money as a benchmark, we
are doomed to sink. The Turkish lira, our
money, that is what we will go forward
with. Not with foreign currency.”
Erdoğan said the government was
concentrating all its strength and
resources on establishing a new
economy focused on employment and
stability.
“Our aim is to provide both business
people and citizens with a climate of
trust and stability,” he noted.
Erdoğan also reiterated his view
that interest rates were the cause of
inflation.
He said that for some time, they have
been waging the battle of saving the
Turkish economy from the cycle of highinterest
rates and high inflation and
taking it on the path of growth through
investment, employment, production,
exports and current account surplus.
“Interest rates down, interest rates up.
My friends, let us please take this out of
our books,” he stressed. “Interest rates
are the reason, inflation is the result.
Interest makes the rich richer and the
poor poorer.”
Soaring industrial production and
exports were the driving force in a year
of strong economic growth for Turkey.
Export figures shattered record after
record almost every month, while
industrial production climbed on an
annual basis for 16 months in a row.
By keeping up production levels and
following pandemic measures, Turkish
companies forged ahead of their
international rivals during the COVID-19
crisis and global supply chain crunch,
gaining a foothold in new export
markets while meeting domestic needs.
Offering high-quality products at
affordable prices with faster and
reliable delivery, Turkish firms managed
to establish themselves as the most
important suppliers during a period of
worldwide uncertainty.
After being hit in spring last year as
the pandemic hurt trade with Ankara’s
biggest partners, Turkey’s exports in
the first half of the year hit $100 billion,
the highest six-month figure ever.
The upward trajectory continued as
the figure climbed to $203.1 billion (TL
2.73 trillion) as of the end of November,
marking an all-time 11-month high.
Sales had exceeded the $20 billion
threshold for the first time ever on a
monthly basis after hitting $20.8 billion
in September.
By October, Turkey’s share in global
exports had surpassed 1%, another first
for the country that marked a more than
sixfold rise over the past two decades.
Turkey’s economy had registered
a major rebound in 2021 after a
sharp slowdown a year earlier due to
COVID-19 restrictions.
The gross domestic product (GDP)
registered a historic 22% expansion in
the second quarter, its highest annual
mark since 1999. The economy grew
7.4% year-over-year in the third quarter.
The country is expected to have ended
2021 with double-digit GDP growth.
Published in September, the
government’s medium-term economic
program projected that the economy
would expand 9% in 2021 and grow a
further 5% in 2022.
Yet, strong readings thereafter
triggered strong views that the GDP
would register a double-digit growth
for 2021.
Under the program, the government’s
growth target for 2023 and 2024 is
5.5%, while the average expansion
target is 5.3%.
This year also marked a major surge
in inflation and the government has
pledged to tackle what is seen as the
economy’s chronic problem.
The annual consumer price index (CPI)
rose to more than 21% in November,
the highest reading since November
2018, after starting the year at 14.97%,
driven by rising food and import
prices, particularly energy, the supply
constraints and the impact of exchange
rate volatility.
Inflation is expected to have exceeded
30% in December, breaching the level
for the first time since 2003, according
to surveys. The government’s program
projects annual inflation to fall to 9.8%
by the end of 2022, while the year-end
targets for 2023 and 2024 were set at
8% and 7.6%, respectively.
The country’s central bank has said
temporary factors were driving prices
higher and forecast that inflation would
follow a volatile course in the short
term.
Its monetary policy in 2022 will be
formulated with a goal of bringing
inflation gradually toward its mediumterm
target of 5%, according to its
annual monetary and exchange rate
policy framework report for 2022,
unveiled . It said monetary policy would
be designed to gradually reach the goal.
Erdoğan has repeatedly endorsed
an economic model based on lower
borrowing costs over the last months,
and the government, regulators and
banking associations have all embraced
the new policy direction.
On Dec. 16, Erdoğan announced a hike of
50.4% in the minimum wage, to become
effective as of Jan. 1, 2022, raising the
monthly amount to TL 4,250 to address
the depreciation in the lira and inflation
spike.
The year 2021 also saw some major
reshuffling in economic management.
Şahap Kavcıoğlu replaced Naci Ağbal as
governor of the country’s central bank
on March 20.
Ruhsar Pekcan was replaced by Mehmet
Muş, a prominent member of the ruling
Justice and Development Party (AK
Party), as trade minister. Nureddin
Nebati took the helm of the Treasury
and Finance Ministry on Dec. 2, after his
predecessor Lütfi Elvan stepped down.
Nebati has been echoing the
government’s new economic model
based on lower interest rates, which is
being endorsed by Erdoğan, who says
the new policy direction will boost
production, jobs, exports and growth.
Nebati said he would focus on addressing
“chronic problems” plaguing Turkey’s
economy, and “high interest rates will
not be a priority.”
Among closely watched data, Turkey’s
calendar-adjusted industrial production
climbed on an annual basis for 16
months in a row, with the greatest spike
of 66% seen in April.
Production expanded by 12.3% year-onyear
in the first quarter of 2021, placing
Turkey at par with top G-20 economies.
The upturn in the Turkish manufacturing
sector continued as the purchasing
managers’ index (PMI) hovered above
the threshold level throughout the year,
except in May, when COVID-19 lockdown
measures were in place for much of the
month.
Despite inflationary pressures and supply
chain disruption, the manufacturing PMI
rose to 52 in November, up from 51.2 in
October.
Following seven months of deficit, the
country’s current account balance also
started posting a surplus from August
onward. According to the latest data,
the surplus stood at $3.16 billion in
October, bringing the 12-month rolling
deficit to $15.4 billion.
Unemployment in Turkey had dropped
from 12.7% in January to 11.2% by
October, according to the Turkish
Statistical Institute (TurkStat). April saw
the year’s highest unemployment figure
of 13.4%, with the lowest level of 10.6%
recorded in June.
The latest data from the Tourism Ministry
showed that the country welcomed 22.8
million foreign visitors between January
and November, marking a jump of 89.6%
year-over-year.