Turkey Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Turkey Country Risk Report
Product Price
$1,195.00

Core Views

  • Relative to the past decade, we expect slower, more balanced growth in the next decade on the back of less abundant foreign capital inflows and slower domestic credit growth.

  • Turkey faces a challenging foreign policy environment amidst heightened regional tensions and rising external security risks as the government attempts to cement its role as an economic and political power in the region.

  • With the Justice and Development Party (AKP) regaining its parliamentary majority in the November 2015 general election, Turkey will operate under a de-facto executive presidential system, with negative implications for institutional quality and government checks and balances.

  • A collapse of the government's ceasefire with the Kurdish separatist PKK is a major step back for the country, weighing on growth potential.

  • While the government's debt load is low by regional standards, the private sector's rampant external borrowing in previous years has greatly increased macroeconomic risks.

  • Despite cheaper oil, Turkey's current account deficit will remain large and a major macroeconomic vulnerability. Turkey will remain reliant on short-term foreign capital inflows to cover the sizeable current account shortfall, leaving it prone to tightening global liquidity and shifts in international risk sentiment.

  • A dovish central bank will keep inflation above target and ensure a volatile growth trajectory.

Major Forecast Changes

  • No major forecast changes

Key Risks

  • The major risk to Turkey's macroeconomic trajectory in the coming years stems from its large external financing requirement. Turkey's large current account deficit and dearth of foreign direct investment inflows leaves the country vulnerable to external shocks and a major outflow of foreign capital, which becomes more likely as the US Federal Reserve commences a tightening cycle. As such, we believe risks to growth are weighted primarily to the downside.

  • Geopolitical conflict and rising incidence of terrorist attacks within Turkish borders have weighed on external trade and tourism inflows, and may escalate in the coming year, dampening further the growth outlook.

Macroeconomic Forecasts (Turkey 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 2.9 3.3 2.9 3.2
Nominal GDP, USDbn 799.9 714.2 706.0 741.6
Consumer price inflation, % y-o-y, eop 8.2 8.8 8.2 7.0
Exchange rate TRY/USD, eop 2.34 2.92 3.20 3.30
Budget balance, % of GDP -1.3 -1.2 -2.1 -2.0
Current account balance, % of GDP -5.4 -4.5 -4.8 -4.9
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Multiple Headwinds Weighing On Growth
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
11
TABLE: NET EXPORTS FORECASTS
11
Monetary Policy
12
Inflation Fighting Credibility Waning Further
12
Monetary Policy Framework
13
External Trade And Investment Outlook
15
Despite Improvement, Current Account Still Major Risk
15
Outlook On External Position
16
TABLE: TOP 5 GOODS EXPORTS & IMPORTS IN 2015
16
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
16
Fiscal And Debt Outlook
18
Spending Pledges To Drive Deficit, Yields Higher
18
Structural Fiscal Position
19
TABLE: MAIN REVENUE & EXPENDITURE CATEGORIES
19
Currency Forecast
22
TRY: More Depreciation Ahead Amid Loose Monetary Policy, Political Risks
22
TABLE: BMI CURRENCY FORECAST
22
Chapter 2: 10-Year Forecast
25
The Turkish Economy To 2025
25
Shine Coming Off Growth Story
25
TABLE: LONG-TERM MACROECONOMIC FORECASTS
25
Chapter 3: Political Outlook
29
SWOT Analysis
29
BMI Political Risk Index
29
Domestic Politics
30
Domestic And Foreign Policy Risks Rapidly Rising
30
TABLE: POLITICAL OVERVIEW
30
Scenario: Turkey-Russia Clash In Syria
32
Long-Term Political Outlook
34
Structural Changes To Continue
34
Chapter 4: Operational Risk
37
SWOT Analysis
37
Operational Risk Index
37
Operational Risk
38
TABLE: OPERATIONAL RISK
38
Trade Procedures And Governance
39
TABLE: EMERGING EUROPE - TRADE PROCEDURES AND GOVERNANCE RISK
39
TABLE: EXPORT AND IMPORT DOCUMENTS
40
TABLE: TRADE PROCEDURES BREAKDOWN
40
Vulnerability To Crime
40
Chapter 5: BMI Global Macro Outlook
43
Global Macro Outlook
43
Tail Risks Mounting Amid Sub-Par Growth
43
TABLE: GLOBAL ASSUMPTIONS
43
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
44
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%)
44
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
45
TABLE: MACROECONOMIC DATA & FORECASTS
47

Assess your risk exposure in Turkey with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Turkey with confidence.

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  • Delivery of the report in print and PDF
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  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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