The investment environment in Turkey is characterised by high potential, but also carries risks that need to be carefully considered
On January 20th, a Slovak delegation headed by Prime Minister Robert Fico visited Turkey. The delegation signed four important treaty documents concerning strategic partnership, cultural, military and economic cooperation. The visit also opened up new opportunities for economic cooperation, especially for Slovak exporters. “During the talks, we discussed the deepening of our mutual relations,” said Turkish President Recep Tayyip Erdogan, who appreciated the active approach of the Slovak side. He also confirmed that Robert Fico had expressed support for Turkey’s accession to the European Union. “Slovakia is an important partner for us and we believe that this cooperation will bring concrete results,” Erdogan added.
One of the key points of the visit was a round table for Slovak and Turkish entrepreneurs, which took place in Ankara in the presence of Deputy Prime Minister and Minister of Economy Denisa Sakova and Turkish Minister of Trade Ömer Bolat. The meeting was attended by Slovak exporters from various sectors including metallurgy, logistics, energy and IT. The presence of representatives of Eximbank, SARIO and the Council of Slovak Exporters was also an important part of the meeting.
“I consider this meeting to be very beneficial, as there is only a small circle of entrepreneurs who already have concrete activities and projects with Turkish partners. At the same time, the Turkish side provided us with selected partners upon request, so each entrepreneur had his selected business partner on the other side of the table,” said the Chairman of the Council of Slovak Exporters Lukáš Parízek. The issue of energy security was also an important topic of the talks, with the possible use of the TurkStream gas pipeline being discussed. “Energy cooperation is one of our priorities and we are ready to explore all options that will help us ensure stability and diversification of supply,” Prime Minister Fico stressed.
The hub between Europe and Asia
Turkey’s economy, which is the seventeenth largest in the world by nominal GDP in 2023, is growing at a rate of almost five per cent. Despite the economic challenges, the country is continuing its stabilisation measures, which has been positively assessed by reputable rating agencies. Moody’s upgraded Turkey’s credit rating from B3 to B1 in July 2024, the first time since 2012, while maintaining a positive outlook for the country. Fitch Ratings and S&P Global Ratings presented similar views, supporting Turkey’s image as a country with improving financial stability. “Turkey, with its strategic location, is an important trading partner and a regional hub between Europe and Asia,” Eximbank risk analyst Tatiana Gécová said. “Despite challenges such as currency volatility, inflation and geopolitical risks, Turkey has a well-developed banking system and low labour costs, making it attractive for investors.”
Foreign trade and tourism play an important role in the Turkish economy. Revenues from tourism account for around five per cent of GDP, reaching $54 billion in 2023. However, Turkish banks continue to face restrictions on access to international credit, leading to the use of alternative forms of financing such as factoring or export credits. The investment environment in Turkey is characterised by high potential, but also carries risks that need to be carefully considered. The country continues to play a key role in the geopolitics and economy of the region, and its economic transformation is being closely monitored internationally.
Huge market
With more than 80 million inhabitants and a strategic location, Turkey is a gateway for Slovak companies to expand their activities not only in the region, but also in global markets. Initiatives such as the Slovak-Turkish Business Forum further strengthen trade relations and open up new opportunities for mutual cooperation. Turkey is an important trading partner for Slovakia with great potential for the development of cooperation. The trade balance between the countries shows a steady growth. In 2022, Turkey exported $803 million worth of goods to Slovakia, with aluminium products, automobiles and motor vehicle components being the most important export items. Slovakia, on the other hand, exported goods worth over one billion euros to Turkey.
“From the perspective of ‘small’ Slovakia, this ‘huge’ market is very promising and fully reflects our territorial and sectoral priorities. At the same time, it represents an opportunity for exports and investments,” said Rastislav Podhorec, Eximbanka’s CEO. Slovak companies have prospects not only in traditional sectors such as defence, energy, engineering and information technology, but also in ICT, logistics, transport and construction. An example of successful Slovak-Turkish cooperation is the Heneken Metalürji Döküm project in Izmir. This new aluminium plant, which was established in cooperation between the Heneken Group and Turkish partners, is currently the largest Slovak investment on the Turkish market. “Heneken Group is developing thanks to global partnerships and successful investments, and new projects such as this one in Turkey are key to further growth,” said Heneken Group owner Michal Hudoba.
How to trade and invest in the country
Eximbank of the Slovak Republic plays a key role in supporting Slovak exporters trying to penetrate the Turkish market. “Exporters cooperating with Eximbanka most often request financing, elimination of potential risks through insurance activities and strengthening of competitiveness on the Turkish market,” added Juraj Macho from the Tradable Risk Insurance Department. Eximbanka is in active dialogue with Turkish partners and institutions.
“Turkey is a country with one of the highest numbers of EPC contractors in the world. Our goal is to support Slovak companies’ involvement in consortia with Turkish EPCs, which can open the door to other global projects,” said Matúš Šársky, Eximbanka’s Director of International Relations. “Turkey is a strategic partner country on the EU’s south-eastern border. It is eligible for the implementation of projects under EU development instruments such as IPA III or EFSD+. Eximbanka is ready to support Slovak companies in engaging in these initiatives, but success depends on the identification of suitable projects and the capacity of Slovak companies,” added M. Šársky.
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