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The advantages of investing in the Turkish market

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Entrepreneurs everywhere are constantly looking for ways to gain an advantage over their competition. It may come in the form of an innovative new product, offering consumers something that none of their rivals can.

It might be in the shape of implementing a new workflow or process to save both time and money – two extremely precious commodities in the world of business.

Alternatively, organisations may look to branch out into different markets to gain their edge. Some territories offer excellent prospects for investors to expand their portfolio and make significant profits. Turkey is one such nation, but which markets provide the opportunities and how can they be capitalised upon?

Which markets provide investment opportunities?

The sectoral opportunities in Turkey are vast and varied. Although tourism has taken a hit in recent weeks due to the Coronavirus pandemic, the nation will continue to prove a fashionable choice for holidaymakers in the long term. It was the sixth most popular destination in 2018, with 46 million visitors in 2018, generating a turnover of $29.5 billion.

Its geographical location also makes it an attractive prospect for potential investors. Situated at the crossroads of Europe, the Middle East and Central Asia, Turkey is perfectly placed for swift access to a wide range of markets. There are 433 shopping centres with a combined leasable area of 13 million square metres, and foreign direct investment in real estate and construction amounted to $5.9 billion in 2018. That combination of a strategic location and available space means investors are drawn to the possibilities it holds.

The favourable climate means Turkey enjoys a booming agricultural sector. The industry employs around one in five of the total workforce and contributed $42.5 billion to the nation’s GDP in 2018. It is the world’s seventh largest agricultural producer and is the leading provider of the likes of hazelnuts, sultanas, dried apricots and dried figs. The country exports 1,800 different agricultural products to almost 200 countries and its advantageous geographical location allows it to do so more easily.

The Turkish lira is in decline – but why?

Despite the productivity of the markets mentioned above – and more – the Turkish economy has suffered over the past couple of years, due to a combination of factors. There is political unrest, with President Recep Tayyip Erdogan’s rule being strongly challenged by the opposition Republican People’s Party.

Meanwhile, Turkey’s belated release of American pastor Andrew Brunson was the source of significant tension between authorities in Ankara and the United States. There are doubts surrounding the Turkish government’s ability to manage the country through the economic crisis, with inflation rising to 15% - all of which has contributed to a decline in the lira.

In March, it was reported that the lira had fallen 10% since the start of 2020, and by early May it had fallen through the $7 barrier.

What opportunities does that provide?

That exchange rate could mean foreign exchange traders and brokers are alerted to potential profitable prospects on the forex markets. Those with large liquidity in major currencies such as the US dollar, Euro and the Japanese yen could be in a strong position to take advantage of the lira’s weakness. Subsequently, they may be able to capitalise on its recovery once the country comes through the worst of the Coronavirus and political crises that are currently damaging the economy.

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