Turkey News February 2021

Covid-19 Status

(as at February 17, 2021)

Business

Daikin Turkey plans to invest USD 53 mn in 2021
Hasan Önder, CEO of the Turkish subsidiary of Daikin, a major HVAC systems manufacturer headquartered in Japan, has announced that the company shall invest USD 53 mn in 2021 for new production lines in Turkey. Daikin had acquired its Turkish competitor Airfel in 2011. The new investments are set to increase the number of jobs from 1,400 to 2,100.
Jan. 13, 2021

Plug and Play opens office in Istanbul
Silicon Valley-based Plug and Play Tech Center, the world’s largest corporate innovation platform, has opened an office in MEXT, the technology centre of the Turkish Employers’ Association of Metal Industries (MESS), in Ataşehir/Istanbul. The platform is expected to boost the growth of start-ups by providing access to global customers and investors.
Jan. 15, 2021

Home sales increase by 11.2% in 2020
1.5 million homes were sold in Turkey in 2020, an increase of 11.2% compared to 2019. 1.0 million thereof were second-hand sales. Mortgaged sales increased by 72.4%, whereas other home sales decreased by 8.9%. The main reason of the increase was the low-interest loan campaigns conducted between June and August 2020.
Jan. 15, 2021

EBRD allocates largest resource to Turkey
The European Bank for Reconstruction and Development (EBRD) has invested EUR 1.7 bn in 33 projects in Turkey in 2020. Thus, Turkey received the largest share among all countries in the EBRD’s total investment volume of EUR 11 bn. More than half of this investment amount was allocated through local banks.
Jan. 15, 2021

Automotive demand surges in 2020
In 2020, Turkish automotive production contracted by 11.2%, down to 1,297,854 vehicles, whereas domestic sales increased by as high as 61.9%, to 796,200 vehicles. The main reasons of the high increase in demand have been the deferred demand from 2019, a decrease in loan interest rates, and people avoiding public transportation due to the coronavirus pandemic. The volume of exported vehicles declined by 26.8%, whereas imports increased by 54.1%.
Jan. 17, 2021

Tecno Mobile to produce mobile phones in Turkey
Chinese smartphone producer Tecno Mobile has decided to start producing mobile phones in Turkey, following an investment of USD 25 mn. The company’s new production site in Pendik, Istanbul, will also serve as a production hub for the European market. The first made-in-Turkey Tecno shall be launched in March.
Jan. 20, 2021

Discovery, Inc. acquires 35% of BluTV
U.S.-headquartered media and entertainment company Discovery, Inc. has acquired 35% of BluTV, a leading Turkish online video platform established by Doğan Holding. Discovery, Inc. has already been investing in Turkey for 20 years, establishing its local office in 2012.
Jan. 20, 2021

White goods market grows by 16.5%
Turkey’s white goods market has grown by 16.5% in 2020 to reach 7.8 million units. Total production, on the other hand, increased by only 3.5%, reaching 29.2 million units. This is attributable to the slowdown in exports (0.5%), whereas the import volume increased by 9.8%.
Jan. 22, 2021

Tourism revenues plummet
Due to the travel restrictions implemented in 2020, Turkey’s tourism revenues dramatically decreased by 65.1% compared with 2019, down to USD 12.1 bn. The number of visitors decreased by 69.5% to 15.8 million. The average expenditure per capita, however, increased to USD 762, up from USD 666 in 2019.
Jan. 29, 2021

Excise duty on communications raised
The excise duty on communications, which had been imposed on phone, internet and television services, has been raised from 7.5% to 10% by a new decree issued on Jan. 29.
Jan. 31, 2021

Turkey continues to be the leading card market in Europe
BKM (the Interbank Card Centre) has reported that the volume of payments by cards in Turkey has increased by 17% in 2020 up to TRY 1.15 trn, and the payments by cards on the internet even by 37% to TRY 260 bn. The pandemic has been identified as the driving force behind the high growth rate. The leading item in card payments was “supermarket/food” with TRY 341 bn. Turkey continued to be the largest card market in Europe with 264 million cards in 2020.
Feb. 1, 2021

 

Politics

EU imposes anti-dumping tax on Turkish steel imports
The European Commission has introduced an anti-dumping tax between 4.8 and 7.6% on certain steel products imported from Turkey, in order to protect its domestic producers against Turkish steel exporters. The tax shall remain in force for at least 6 months.
Jan. 7, 2021

Turkish government launches National Space Programme
Turkey’s first National Space Programme, introduced by President Recep Tayyip Erdoğan, involves a plan to send a domestically produced hybrid rocket to the moon in 2023. Furthermore, a trademark to develop a new-generation satellite is to be created.
Feb. 10, 2021

University students detained following protests
The appointment of a new rector, Prof. Dr. Melih Bulu, to Boğaziçi (Bosphorus) University by a presidential decree on Jan. 2, rather than being elected from within the faculty, has sparked mass demonstrations by students and staff, sending riot police to the school’s perimeter. Bulu is a member and former operative of the ruling Justice and Development Party. Subsequently, at least 11 students were detained, and 25 students placed under house arrest, with the number of arrests growing as protests spread to other universities around the country.
Feb. 11, 2021

 

Economy

Imports increase 4.3% in 2020
In 2020, Turkish exports decreased by 6.3% over the previous year to USD 169.5 bn, whereas imports increased by 4.3% to USD 219.4 bn. In December 2020, the exports of the Turkish economy increased by 16.0% while imports were up 11.6%, YOY. With exports rising to USD 17.9 bn, and imports to USD 22.4 bn, the trade deficit decreased by 3.0%, down to USD 4.5 bn. On the other hand, the annual trade deficit increased by 69.1% up to USD 49.9 bn. In 2020, the main partner for exports was Germany (USD 16.0 bn), ahead of the UK (USD 11.2 bn), and the USA (USD 10.2 bn). China was the country where the most imports to Turkey came from (USD 23.0 bn), followed by Germany (USD 21.7 bn), and Russia (USD 17.9 bn).
Jan. 29, 2021

Inflation increases
In January 2021, consumer prices in Turkey rose by 1.68% in comparison to the previous month, with the CPI going up by 14.97% YOY. The highest monthly rise was registered in health (4.25%), ahead of housing (3.02%). The highest decrease was in clothing & footwear with -4.37%. The biggest annual increases were in miscellaneous goods & services (24.53%), and furnishings & household equipment (23.25%). The domestic producer price index (D-PPI) increased by 2.66% monthly, and by 26.16% YOY.
Feb. 3, 2021

Turkey’s population reaches 83.6 million
According to the Turkish Statistical Institute, the population of Turkey has become 83,614,362 as of Dec. 31, 2020. The population growth rate in 2020 was 5.5 per thousand, decreasing from 13.9 per thousand in 2019. The official population of Istanbul decreased by 56,815, down to 15,462,452.
Feb. 4, 2021

Unemployment announced as 12.9% in November
In November 2020, some 4,005,000 people in Turkey aged 15 and older were officially out of work. The unemployment rate was 12.9%, a 0.4-point decrease YOY. The youth unemployment rate in the 15-24 age bracket increased to 25.4%. The labour force participation rate went down to 49.3% in total, and to 30.6% for females. Of those with employment in this period, 56.2% were employed in the service sector, 20.9% in industry, 16.7% in agriculture, and 6.2% in construction.
Feb. 10, 2021

Industrial production increases by 9.0%
Turkey’s industrial production index in December went up by 9.0% YOY, with the manufacturing industry recording an increment of 9.5%. On the other hand, the annual average increase was 1.6% for the total industry, and 1.8% for the manufacturing industry. In December, the highest increase in the manufacturing industry category took place in the product groups “other non-metallic mineral products” (27.5%), and the highest decrease in “leather and related products” (-12.2%). On the other hand, the highest annual average increase was reported in “wood and products of wood and cork, except furniture” (12.1%), and the highest annual average decrease in “other transport equipment” (-19.1%).
Feb. 12, 2021

Turkish Central Bank keeps interest rate constant
The Central Bank of the Republic of Turkey has kept its policy rate (one-week repo auction rate) constant at 17.00%. The bank stated that “the upward trend in international commodity prices, supply constraints intensifying in some sectors, and the adjustments in wage and administered prices maintain their importance for the medium-term inflation outlook”. Hence, the bank has decided to maintain its tight monetary policy.
Feb. 18, 2021

Overview of Monthly Data

Growth Rates

Inflation