Turkey News November 2021
(as at November 21, 2021)
Hugo Boss to expand capacity in Turkey
Heiko Schäfer, COO of the German ready-wear manufacturer Hugo Boss, has announced his company’s plans to expand the capacity in its Izmir plant, emphasizing Turkey’s proximity to Europe and high employee efficiency. The plan involves an investment of EUR 4 mn in 2022, and an additional EUR 5 to 6 mn in 2023. Hugo Boss has already invested EUR 90 mn in its 22 years in Turkey, where it currently employs 3,300 people. The new investment is to create 1,000 additional jobs by the end of next year.
Oct. 14, 2021
Ford produces first transmission made in Turkey
Ford Otosan, a joint venture of Ford Motor Company and Koç Holding, has started producing the first Turkish-manufactured transmission, following an investment of EUR 58 mn. With this Ecotorq transmission, the local content ratio of the heavy commercial vehicles produced in the Eskişehir plant shall increase from 73 to 90 percent.
Oct. 20, 2021
RHI Magnesita acquires Sörmaş
Austrian industry giant RHI Magnesita has acquired 85% of the Turkish refractory manufacturer Sörmaş, headquartered in Söğüt (Bilecik province), for EUR 38.8 mn. Established in 1976, Sörmaş has an annual production capacity of 60,000 tons.
Oct. 20, 2021
Sovos to acquire Digital Planet
Boston-based global tax software provider Sovos has agreed to acquire Turkish Digital Planet, a cloud compliance solutions company with 150 employees. Steve Sprague, Sovos’ General Manager, Global Value-added Tax, stated “As our second acquisition in Turkey, Digital Planet reinforces the Sovos commitment to the local and regional market, as we grow our software development organization in Istanbul.”
Oct. 20, 2021
New tax law issued
New tax rules have been introduced for social media content producers and developers of mobile device applications. Furthermore, earnings subject to the simple taxation method have been exempted from income tax. Beside other provisions, the number of provisional tax returns to be declared has been decreased from 4 to 3.
Oct. 26, 2021
Firmenich invests in Gebze
Swiss fragrance and flavour manufacturer Firmenich, in alliance with MG International Fragrance Company, has broken the ground for a new production facility in Gebze (Kocaeli province). The plant is to be commissioned in 2023 following an investment of CHF 47 mn. With a production capacity of 20,000 tons, the plant will serve Turkey as well as the Middle East and Central Asia regions.
Nov. 8, 2021
EC issues Turkey report
The European Commission has released its 2021 Report on Turkey. The report makes striking statements regarding deficiencies in Turkey’s democratic institutions and raises concerns in the Turkish economy.
Oct. 19, 2021
Turkey and Nigeria sign cooperation agreements
The Turkish President Recep Tayyip Erdoğan has met with the Nigerian President Muhammadu Buhari in Abuja. The two heads of state signed seven agreements regarding taxation, mining, hydrocarbon, energy, youth, political consultations, and the defence industry. Erdoğan commented that the trade volume between the two countries has already reached USD 2 bn, and they are determined to take a step further to enhance Turkish-Nigerian cooperation.
Oct. 21, 2021
Syria and Iraq military missions extended
The Turkish parliament has approved extending the Turkish army’s mandate to launch operations in Syria and Iraq by two years. The reason of the extension was given as the continuing activities of Kurdish militia PYD/YPG in Syria.
Oct. 27, 2021
DEİK and BVMW sign cooperation agreement
The Turkish Foreign Economic Relations Board (DEİK) and the German Association of Small and Medium-Sized Enterprises (BVMW) have signed a cooperation agreement. The main targets of the agreement are increasing the mutual trade volume from USD 40 to 50 bn as well as cooperation in third countries – particularly in Africa –, supply chain, the European Green Deal, and digitalization.
Oct. 29, 2021
Exports increase by 30.0% in September
In September 2021, the exports of the Turkish economy soared 30.0%, whereas imports were up 11.9% over the same month of the previous year (YOY). With exports increasing to USD 20.8 bn, and imports to USD 23.3 bn, the trade deficit dropped 47.5% to USD 2.5 bn. In September, Turkey’s main partner for exports continued to be Germany (USD 1.7 bn), ahead of the USA (USD 1.4 bn) and the UK (USD 1.3 bn). China was again the country where the most imports to Turkey came from (USD 2.9 bn), followed by Russia (USD 2.4 bn) and Germany (USD 1.7 bn).
Oct. 27, 2021
Inflation continues to increase
In October 2021, consumer prices in Turkey rose by 2.39% in comparison to the previous month, with the CPI going up by 19.89% YOY. The highest monthly rise was registered in clothing & footwear (7.56%), followed by alcoholic beverages & tobacco (5.97%). No decrease occurred among the main product groups. The biggest annual price increase was in food & non-alcoholic beverages (27.41%). The domestic producer price index (D-PPI) rose by 5.24% monthly, and by 46.31% YOY.
Nov. 3, 2021
Unemployment announced as 11.1% in September
In September 2021, some 3,754,000 people in Turkey aged 15 and older were officially out of work. The non-seasonally adjusted unemployment rate was 11.1%, a 1.3-point decrease YOY. The labour force participation rate increased to 53.0% in total, and to 34.7% for females. Of those with employment in this period, 54.0% were employed in the service sector, 21.4% in industry, 18.0% in agriculture, and 6.6% in construction.
Nov. 10, 2021
Industrial production gains 8.9%
Turkey’s industrial production index in September went up by 8.9% YOY, with the manufacturing industry recording an increment of 9.7%. The highest increases in the manufacturing industry category took place in the product groups “other transport equipment” (40.8%), “other manufacturing” (19.5%), and “beverages” (18.9%). The highest decreases were reported in “computer, electronic and optical products” (-10.0%), “motor vehicles, trailers and semi-trailers” (-7.5%), and “repair and installation of machinery and equipment” (-7.3%).
Nov. 12, 2021
Turkish Central Bank reduces interest rate further
The Central Bank of the Republic of Turkey has reduced its policy rate (the one-week repo auction rate) to 15.00%, down from 16.00%. The bank stated that it has decided to reduce the policy rate after having evaluated “the analyses to decompose the impact of demand factors that monetary policy can have an effect, core inflation developments and supply shocks”. Forex markets reacted forcefully, pushing the USD and EUR rates against the Turkish lira to all-time highs.
Nov. 18, 2021
Overview of Monthly Data