The Turkish economy may grow more than five percent this year, Industry Minister Nihat Ergun told Reuters, giving a bullish assessment on the economic outlook well in excess of analysts’ expectations.
Ergun also said foreign direct investment (FDI) in the major emerging market economy was this year expected to exceed $15 billion, including real estate sales. Last year, FDI amounted to some $15.9 billion.
The minister made the comments in the light of gross domestic product figures on Monday showing Turkey's economy was Europe’s fastest growing last year with expansion of 8.5 percent.
Growth is expected to slow sharply this year, with analysts estimating expansion below 3 percent and the IMF expecting 2.3 percent growth. Ergun’s forecast far exceeded those and a 4 percent prediction in the government's medium-term program.
“It would not be a surprise to see growth above 5 percent this year,” the minister said in an interview late on Tuesday, but added that the economy was subject to risks generated by strife in the Middle East.
“The effects of the Middle East turmoil on crude oil prices represent a risk element for the Turkish economy. Parallel to this, we are also affected by any excessive forex volatility,” Ergun said.
“Our economy has the dynamism to compensate for these risk factors,” he said, adding growth will be low but not negative in the first quarter due to base effects before recovering from the second quarter.
“We have established macroeconomic balances, our financial system is good, we are careful on budget balances, fiscal discipline is being maintained. All this gives investors confidence,” Ergun said.
Besides the regional risks, Ergun said there were also some positive messages from countries such as China, the United States and India.
“There is plentiful liquidity in some places and Turkey has a good potential to turn this into investment,” he said.
projects Automative, computer
Commenting on the Turkish government’s aim to produce a fully domestic car brand, Ergun said Turkish conglomerate Koc Holding, Fiat , Ford, Renault and Hyundai had expressed interest in the project.
“(Domestic automotive) sector sales have reached 600,000 units. The domestic automotive market could reach one million (units) within five years. The rapidly growing domestic market is one of the reasons for saying to the sector ‘build a local brand’,” he said.
“Good domestic vehicle production could take a 100,000 unit share of the market,” he added.
He also said the government’s planned $7-8 billion project to produce tablet computers for schools, dubbed the FATIH Project, had attracted interest from around 30 domestic and foreign companies and consortiums.
The project envisages the sale of around 25 million computers within 10 years, with production in Turkey and a high proportion of local input.
Among companies to express an interest are Nokia, Samsung , Intel, Sony, Sanyo, Vestel, Arcelik, Casper and Exper.