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Turkey News February 2022

Covid-19 Status

(as at February 13, 2022)

turkey covid february 2022Business

43.5% increase in housing sales to foreigners
In 2021, a total of 1,491,856 housing units were sold in Turkey, a slight decrease of 0.5% over the previous year. 19.7% of sales were mortgaged sales. Istanbul had the largest share in sales with 18.5%. On the other hand, the number of housing units sold to foreigners increased by 43.5% to 58,576. The top nationalities among foreign buyers were Iran, Iraq, Russia, Afghanistan, and Germany, in that order.
Jan. 14, 2022

Turkish start-ups raise USD 1.55 bn in 2021
According to the Turkey Start-Up Ecosystem report, both the number and value of investments in start-ups have reached record levels in 2021. In 294 funding rounds, Turkish start-ups attracted investments in excess of USD 1.55 bn. Accordingly, Turkey has become one of the top ten markets in Europe in terms of investment volume, and the second largest market in the MENA region. The main sectors of investments were fast grocery delivery, gaming, real estate technologies, fintech and blockchain.
Jan. 20, 2022

Turkish automotive market contracts
In 2021, automotive production in Turkey contracted by 1.7%, down to 1,276,140 vehicles, and domestic sales dropped to 772,722 vehicles, a decrease of 2.9%. While the volume of imported vehicles declined by 0.3%, exports increased by 2.2%. As of December 2021, the total number of road motor vehicles registered to traffic exceeded 25.2 million, 54.3% thereof being passenger cars. The average age of all registered cars is now 13.6 years.
Jan. 17-26, 2022

White goods production grows by 17%
Turkey’s white goods market has grown by 9% in 2021 to reach 8.5 million units. Total production increased at a higher rate, by 17%, reaching 34.1 million units. This is attributable to a high increase in exports (18%), reaching 25.9 million units.
Jan. 27, 2022

EBRD allocates record-high resource to Turkey
The European Bank for Reconstruction and Development (EBRD) invested EUR 2 bn in projects in Turkey in 2021, an all-time record high. 85% of this amount was allocated to the private sector, and 55% to projects supporting sustainability. Arvid Tuerkner, EBRD Managing Director for Turkey, stated that the high inflation creates a more difficult environment for investments; on the other hand, the ratification of the Paris Agreement by Turkey is expected to pave the way for more green investments.
Jan. 29, 2022

Turkish tourism recovers in 2021
Recovering from the negative impact of the pandemic in 2020, Turkey’s tourism revenues were up 103.0% in 2021 to reach USD 24.5 bn. The number of visitors increased by 85.5% to 29.4 million. The average expenditure per capita also improved to USD 834, up from USD 762 in 2020.
Jan. 31, 2022

Schindler acquires Omsan
Swiss Schindler’s subsidiary Schindler Türkeli Asansör Sanayi has acquired the Turkish elevator manufacturer Omsan. The Turkish Competition Authority approved the acquisition. Omsan had begun elevator production and installation in 1975, and currently has 180 employees in its plant in Gebze, Kocaeli province.
Feb. 2, 2022

Azelis acquires Tunçkaya
Belgian chemicals giant Azelis has acquired the Istanbul-based food ingredients and additives distributor Tunçkaya. Azelis had already acquired two other Turkish companies, Ekin Kimya and Tara Kimya, in 2020. Established in 1973, Tunçkaya has 25 employees.
Feb. 9, 2022

Politics

Ukraine and Turkey sign FTA
Turkish President Recep Tayyip Erdoğan has met with Ukraine’s President Volodymyr Zelensky in Kyiv. A free trade agreement (FTA) and other agreements regarding cooperation in several topics were signed during the visit. According to the FTA, the quotas in road transportation between the two countries were lifted. Erdoğan emphasized the target to raise the mutual trade volume to USD 10 bn from the current level of USD 7.5 bn. Regarding the conflict between Russia and Ukraine, the President reiterated Turkey’s support for the territorial integrity of Ukraine.
Feb. 4, 2022

Economy

Turkish Central Bank keeps interest rate constant
The Central Bank of the Republic of Turkey has kept its policy rate (the one-week repo auction rate) constant at 14.00%. The bank stated that it “expects the disinflation process to start on the back of measures taken for sustainable price and financial stability along with the decline in inflation owing to the base effect.”
Jan. 20, 2022

Exports rise 32.8% in 2021
In 2021, Turkish exports increased by 32.8% over the previous year to USD 225.3 bn, whereas imports reached USD 271.4 bn, an increase of 23.6%. In December 2021, the exports of the Turkish economy increased by 24.9% to USD 22.3 bn, while imports were up 29.9% YOY, reaching USD 29.1 bn. The annual trade deficit decreased by 7.5%, down to USD 46.1 bn. In 2021, Turkey’s main export partner was Germany (USD 19.3 bn), ahead of the USA (USD 14.7 bn), and the UK (USD 13.7 bn). China was the country where the most imports came from (USD 32.2 bn), followed by Russia (USD 29.0 bn), and Germany (USD 21.8 bn).
Jan. 31, 2022

Inflation increases sharply
In January 2022, induced mainly by the depreciation of the Turkish lira, consumer prices in Turkey rose by as high as 11.10% in comparison to the previous month, and the CPI went up by 48.69% YOY. The highest monthly increment was registered in alcoholic beverages and tobacco (21.90%), followed by housing (18.91%). The only decrease among the main product groups occurred in clothing and footwear with -0.24%. The biggest annual price increase was in transportation (68.89%). The domestic producer price index (D-PPI) rose by 10.45% monthly, and by 93.53% YOY.
Feb. 3, 2022

Turkey’s population reaches 84.7 million
As announced by the Turkish Statistical Institute, the population of Turkey has become 84,680,273 as of Dec. 31, 2021. The population growth rate in 2020 was 12.7 per thousand. The official population of Istanbul increased to 15,840,900, and the city with the second-highest population was Ankara with 5,747,325 inhabitants.
Feb. 4, 2022

Foreign companies take 9% share in investments
According to the investment incentive statistics, the total amount of fixed investments stood at USD 274.9 bn in 2021, close to the level of the previous year (USD 275.6 bn). The share of foreign capital companies was 9%. The manufacturing industry accounted for 67% of the fixed investment amount, followed by service sector with 17%.
Feb. 7, 2022

Unemployment announced as 11.3% in December
In December 2021, some 3,749,000 people in Turkey aged 15 and older were officially out of work. The non-seasonally adjusted unemployment rate decreased by 1.7 points YOY to 11.3%. The labour force participation rate increased to 51.9% in total, and to 33.6% for females. The distribution of the labour force according to sectors was: services 57.2%, industry 22.4%, agriculture 14.6%, and construction 5.9%.
Feb. 10, 2022

Industrial production keeps gaining
Turkey’s industrial production index in December went up by 14.4% YOY, with the manufacturing industry recording an increment of 16.2%. The highest increases in the manufacturing industry category occurred in the product groups “other transport equipment” (81.2%), “computer, electronic and optical products” (62.7%), and “leather and related products” (33.0%). The only decrease was reported in “motor vehicles, trailers and semi-trailers” (-0.3%).
Feb. 11, 2022

Fitch downgrades Turkey’s rating
Fitch Ratings has decreased Turkey’s Long-Term Foreign Currency Issuer Default Rating to non-investment grade B+ while keeping the country’s outlook at negative. The agency stated that “Policy-driven financial stress episodes of higher frequency and intensity have increased Turkey’s vulnerabilities in terms of high inflation, low external liquidity and weak policy credibility.”
Feb. 11, 2022

New government supports announced
The Turkish government has announced new supports to the economy. The VAT rate on basic foodstuffs has been cut from 8% to 1%. Besides, the Credit Guarantee Fund is to provide financial support of TRY 60 bn for exports, investments, and working capital. Furthermore, in order to integrate under-the-mattress savings into the economy, a new gold deposit account system has been introduced.
Feb. 14, 2022

Overview of Monthly Data

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Growth Rates

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Inflation

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