Department of Summary Analysis of NCE RK "Atameken" provided a brief overview of the Turkish economy

1. The structure of the Turkish economy

The dynamic development of the Turkish economy in the last decade had a positive impact on the socio-economic situation of the country and transformed the economic structure of the traditionally agrarian country. In recent years, the share of the agricultural sector in the GDP is gradually decreasing due to the rapid growth of the service sector and industrial production. In conjunction with the full support and modernization of agriculture, the country has entered the group of leading industrial and agricultural countries.

The development of Turkish industry started with the processing of agricultural raw materials. To this day, the leading sectors with the largest employment are food and light industry, although heavy industry is developing rapidly in the recent years.

The largest share in GDP - 84% is the manufacturing industry. All industries are developed in proportion in the country. Automotive and chemical industry can be named the most dynamic industries. A strategic sector of the economy of Turkey is tourism. The income of the state treasury from the tourist industry accounts for more than half of the volume of Turkish exports of services.

2. Evaluation of the market potential and business prospects

Turkey's economy continues to grow, which was 3.5% in 2015. According to the estimates of the World Bank, the positive outlook of the Turkish economy to a greater extent is due to the fall in oil prices, which will reduce the cost of Turkish productions and, accordingly, will contribute to the growth of the industrial sector.

3. Foreign trade and foreign trade regime

The priority direction in the foreign economic sphere is the European Union, due to Turkey's interests in the further integration of the EU and the deepening of relations with the West European countries in political, economic and military fields.

Table. Indicators of Turkey's foreign trade in 2015

Source: Trademap on the basis of the UN Statistics Division

Conditions of access to the market

The highest import tariffs are set in relation to products of commodity groups "Live animals and products of animal origin" - 107,6%, "Vegetable products" - 53.9%, "Products of food, alcoholic and non-alcoholic beverages and vinegar, tobacco" - 34.6%.

When importing "pulp from timber or other fibrous plant material" and "works of art, collectibles and antiques" import customs duty is 0%.

The relatively low rate of customs tariff is applied to "Mineral products" - 0,2%, "Precious and semi-precious stones, precious metals, jewelery, coins" - 0.3%, and "Machinery, equipment, instruments and devices" - 0, 6%.

In respect of trade between Kazakhstan and Turkey, the most favored nation treatment (MFN) is applied, according to which the parties provide in the mutual trade rights, benefits and privileges not less favorable than one of the Parties provides in respect of any goods from any third country.

4. Bilateral trade and cooperation

Foreign trade turnover between Kazakhstan and Turkey amounted to 1.9 billion US dollars the end of 2015. The export from Kazakhstan decreased to 1.1 billion US dollars, while imports from Turkey to Kazakhstan amounted to 750 million USD.

Table 1: Trade Indicators of Kazakhstan's foreign trade with Turkey, million USD

Source: Trademap

Table 2. Kazakhstan bilateral trade

Source: Trademap on the basis of the UN Statistics Division

The potential for export of Kazakhstani products

Evaluation of the potential for the Kazakh products carried out on the basis of trade flow data of Trade MAP, which has been developed and maintained by the International Trade Centre WTO on the basis of data of UN.

Analysis of statistical data on global imports of Turkey in comparison with data on exports of Kazakhstan in the world and export of Kazakhstan to Turkey showed that this market represents a certain potential for the export of Kazakh processed products, as evidenced by the data of 2014, showing the presence of Kazakhstan's exports in the world by many imported items in Turkey. The most promising headings at 6-digits HS classifier are presented in the table below.

For selected 36 potential headings, the Turkish imports in 2014 amounted to 13 billion US dollars, world exports of Kazakhstan by 18  positions amounted to 1.8 billion US dollars, exports of Kazakhstan to Turkey - 31.9 million. For all the potential headings, Turkey is a net importer, i.e. by the majority of indicated positions, there is a positive growth of imports in the last five years both in value and in physical terms.

Table 3. Perspective production for export to the Turkish market

5. Direct investment to the Republic of Kazakhstan

Gross inflow of foreign direct investments to Kazakhstan from Turkey for 10 years, (2005-2015) amounted to 3.5 billion USD. At the same time, the level of investment in 2015 from Turkey to Kazakhstan returned to the level of 2009-2010, during the global economic crisis.

Figure 1. Gross inflow of foreign direct investments in Kazakhstan from Turkey

in millions US dollars

Source: National Bank of the Republic of Kazakhstan