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Merrill Lynch Predicts Strong Growth in Turkey over next 10 Years

Posted on 02 September 2011

In a new report, investment banking giant Merrill Lynch predicts that Turkey will be the fastest growing economy in the EMEA region — Europe, Middle East and Africa — the coming 10 years, with fellow emerging markets South Africa and Saudi Arabia not far behind.

“Based on an analysis of growth determinants from demographics to leverage, we conclude that this decade Turkey, S. Africa and Saudi Arabia will improve their growth performance. We see the highest average level of growth in Turkey (4.8%) and S. Africa (4.2%), with most of the rest of the region clustered between 3-4%,” the report says.

It is not only Merrill Lynch that have such strongly positive sentiment towards Turkey, rather it is the common mindset among international investors. This is why foreign direct investment in Turkey is increasing massively.

The latest Central Bank of the Republic of Turkey (CBRT) data on FDI shows a 325% increase in the first 6 months of 2011 compared to the same period of 2010.

An incredible 388% growth in investments from European nations shows that the growth is partly because of positive sentiment about Turkey, and partly because of negative sentiment towards Europe and its sovereign debt crisis. Investments from the Far East grew by 329% and investment from North America grew 140% during the period. Meanwhile, investments from near and middle eastern nations fell 43.3% this is hardly surprising given the effects of the Arab Spring, but disappointing none the less.

Europe is still on its sovereign-debt-ridden knees, the Middle East is volatile and many investors are still unsure of Africa because of its war-torn history and high crime rates, leaving Turkey shining bright as a top investment in the region.

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