Izmir to Istanbul Superhighway Breaks Ground

The massive highway linking Izmir and Istanbul, which is one of the largest infrastructure development projects in Europe broke ground this Thursday,

"We are launching today one of the biggest projects in the history of our republic," said Turkish Prime Minister Recep Tayyip Erdogan at the ceremony.

The project includes a suspension bridge over the gulf of Izmir, which will be one of the biggest such bridges in Europe.

It currently takes 8 hours to travel between Istanbul and Izmir, this will be cut to less than 4 hours, and the distance will also be cut by 140k. This will be massively beneficial to the local economy.

Construction of the 11 billion TYR superhighway alone will create 60,000 jobs (10,000 directly and 50,000 indirectly), and the benefits will continue after its completion in 2017, as businesses can transport goods more quickly and cost effectively to the trading hub and ports of Istanbul.

Istanbul is the cultural centre of Turkey, and one of its biggest, most populous, and fastest growing cities. The benefit of transport links, and the ability to commute to find work in the city grows every day.

The highway will no doubt lead to increasing migration to Istanbul from rural areas, and this could easily push up the value of Istanbul property.

Of course the project alone will no doubt boost sales of property in Turkey, because it, along with many other projects announced and currently underway, shows that the Turkish government is committed, and investing heavily to improve the infrastructure.

EU Accession No Longer Vital to Turkey’s Interests

This week David Cameron called Turkey the BRIC of Europe, but still we expect no progress on the EU issue. This week French foreign minister Bernard Koucher pledged France’s support for Turkey, but still we should expect no progress on the EU issue. The EU will publish a review of Turkey’s progess towards joining the EU, we expect it to show little progress on the EU issue. Until France, Germany and others remove their block, which won’t happen until Turkey opens its ports to Greece, which won’t happen until and so on and so forth – suffice to say we are firmly in the land of deadlock.

But the fact is the Turkish economy grew by more than 10% in the first half of this year, and is predicted to grow 7.5% for the year as a whole, that is growth that Europe’s developed economies like France and Germany can only dream of.

According to a report by HSBC this week emerging markets will be on top of the world table of purchasing power parity within three years; three years during which they will drive the global economic recovery. Turkey was mentioned in the report as one of the biggest drivers of growth. Investment in Turkey is increasing at a rapid rate, including property investment.

EU accession is no longer vital to Turkey’s interests.

This is a common sentiment, in a Hurriyet Daily News article this week titled Forget the EU, RICHARD REID wrote:

In any case, Europe’s closed door may be irrelevant to Turkey’s general prospects. At the moment the country’s global image is one of rude health. Admiring eyebrows are being raised in the capitals that count. Turkey is no longer a minor player. Its momentum should before long carry it to a point where Europeans will be the suitors. And then Turkey can ask them to wait.

EU membership is “no longer such a big deal” for Turkey says Tolga OZCAN, director of Antalya real estate agent New Home in Turkey.

“The Turkish economy enjoyed double-digit growth in both the first and second quarters, with 11.7% growth in the first quarter and 10.3% in the second quarter, compared to growth of 0.7% and 2% respectively for the EU27,” he said. “During this time the biggest growth was recorded in Slovakia with 4.6% in Q1 and 5% in Q2.”

He continued: “On top of that the European banking infrastructure is in disarray, with severe doubts over exactly what levels of bad loans still exist in Spanish, German, Irish and other banks. Compare this to Turkey’s banking system, which, heavily reformed in 2001 is in incredibly good shape.”

Turkey is the BRIC of Europe Says UK PM David Cameron

In a message sent to an important U.K.-Turkish business event organized by the Turkish-British Chamber of Commerce and Industry (TBCCI), UK Prime Minister David Cameron has reiterated the party's sentiment that Turkey is the BRIC of Europe, in reference to the so-called BRIC economies of Brazil, Russia, India and China, grouped together as the world's fastest growing emerging markets.

Turkey is the "BRIC of Europe," he said. "Everyone is talking about BRIC countries and the rapid growth in [the group’s] economies of Brazil, Russia, India, and China. We think that Turkey is a BRIC country of Europe," Cameron said.

This is at least the second time that Cameron has voiced such sentiment in relation to the Turkish economy.

One would find it hard to mount a reasonable argument against him, in fact the figures make Turkey exactly that.

According to Turkstat the Turkish economy grew 11.7% year on year in the first quarter of this year and 10.3% in the second quarter. This is compared to growth of 0.7% and 2% respectively for the EU bloc, and 4.6% and 5% respectively for Slovakia, the fastest growing economy in the EU according to Eurostat data.

The BRICs were put together in that anagram by Goldman Sachs because they were and were likely to be the fastest growing emerging economies in the world. Turkey is without doubt the fastest growing economy in Europe, which means it can be called the BRIC of Europe without too much fear. Wonder if Cameron is pulling any strings to get it into the EU?

Nah, on a serious note, Cameron said that trade between the UK and Turkey could be doubled if both sides work hard on it in the coming years.

Turkish Property Market May Be Boosted by Removal of Visa-Restrictions with Germany

Aydin Cakir, director of Turkey based Turkish property agent New Home in Turkey has said that the removal or easing of visa-restrictions on Turkish travel could boost the Turkish property market, he said on the company’s website:

“Removal or easing of visa restrictions between Germany and Turkey may also boost the Turkish property market. Germany is Turkey’s largest tourism market, and holiday makers tend to become holiday home buyers, visa-free travel would certainly make visiting a property in Turkey easier, and therefore ownership more attractive.”

The comments came in response to the comments of Mercedes-Benz Finansman Türk General Manager Franz G. Koller, who has indicated frustration at Germany’s failure to cut red-tape on travel and investment in Turkey and Germany, which is causing German businesses to “lose ground” on Turkish investments.

Koller seemed particularly hacked off at the fact that the EU had removed visa-restrictions on travel between the EU and 3 non-candidate countries: Serbia, Macedonia and Montenegro, while Turkey, an official candidate since 2005 has been left out in the cold.

Koller’s statements come days after it was revealed that Turkey is now the fastest growing economy in the OECD and one of the fastest in the world. One of the biggest growth sectors in such a rapidly emerging market is automobile ownership, a status of rising affluence. It is certain that Mercedes Benz would very much like to be part of this growth.

Turkish Economy Surges in First Half of Year – Upgrade Predicted

The Turkish economy grew 10.3% in the year to end the second quarter of 2010, and construction grew 21.7% during the period, according to Turkstat. The GDP growth rate for the first half of the year is now 11%, and this is matched by tourism growth in the first half of the year, according to recent data from the Tourism Ministry.

This is impressive growth, but the fact that it means that the Turkish economy grew faster than Brazil (8.8%) and the same as China (10.3%), makes it all the more impressive.

It is little wonder that Standard and Poor have announced that they will upgrade Turkey's debt rating in 12-24 months -- this would give Turkey an investment grade rating. Turkey is already the only country to have been upgraded twice during the financial crisis. S&P also predicted 8% growth for the Turkish economy this year.

Unemployment is also falling, and it is the combination of falling unemployment and economic growth that is bringing reports that the Turkish economy is now well and truly out of the woods in terms of the recession.

Unemployment fell 2.6% in May, and with that the number of jobless people in Turkey fell below 3 million for the first time since August 2007 (before the crisis struck).

With so much growth, it is certainly difficult to imagine Turkey falling backwards into recession; let's face it, it has a long way to fall. What's more Turkey hasn't gone overboard with the stimulus so there is minimal risk that revocation of the stimulus could bring trouble.

I certainly don't see anything but growth in Turkey's short term future. The International Monetary Fund is predicting 5.2% growth this year and 3.4% next year. If you ask me that will prove to be a little conservative.