Germans might not be as troubled because of the ongoing global financial crisis -- often referred to as turmoil more serious than the Great Depression of the 1930s -- at home but because almost all other markets within the 27-member union find it too difficult to escape an economic downturn, they have started to pay increasingly more attention to the Turkish market. “Sixty percent of all 4,800 German companies operating in Turkey have been opened in the past six years,” said Ümmühan Dericioğlu of the German-Turkish Chamber of Commerce and Industry (AHK), speaking at a seminar organized to brief Turkish businesspeople about Germany in Bursa on Thursday.
The AHK, which is not a government agency, is financed by German and Turkish companies, offering advice and help for German and Turkish businesspeople interested in investing in or doing business with the other country.
The EU's 17-member single-currency area eurozone economy stagnated in the first three months of this year, meaning it avoided a technical recession, defined as two consecutive quarters of economic contraction. However, it is widely expected to shrink in the second and third quarters. And economic surveys released on Wednesday suggested that even the region's powerhouse, Germany, is entering a modest downturn. Its services sector unexpectedly stagnated in June, as its purchasing managers index (PMI) reading fell to its lowest since September of last year. "Germany looks to have fallen into a renewed decline, though only a very modest drop in output is signaled. The pace of downturns in other major euro member states is far more worrying," said Chris Williamson, chief economist at PMI provider Markit, in remarks to Reuters.
In the past six years the Germans have shown a much stronger interest in investing in Turkey; the Turkish economy has grown by more than 4 percent on average each year despite the crisis, compared to a paltry 1.6 percent in Germany and even smaller rates for the EU (1 percent) and eurozone (0.9 percent).
Turkey is the EU's sixth largest partner, even ahead of the giant economies of Japan, India, Brazil and South Korea. And within the $120.2 billion EU-Turkey trade volume, some $36 billion was due to bilateral trade between Turkey and Germany. The western European economy, the largest in the EU and the fourth largest worldwide, additionally, is also significant for Turkey in the sense that there are some 3 million Turks living in Germany.
A recent report prepared by the Dutch Bank ING said Turkey will be Europe's fifth largest economy and a key trading hub between Western Europe and developing Middle Eastern and Asian economies by 2030. The June 24 report, titled “Turkey: An Economic Pearl on the Bosphorus,” predicts an average of 5.3 percent growth over the next two decades in Turkey and envisages that the country's growth will likely continue even amid Europe's economic slowdown. The report suggested that companies and investors in Europe should seek to ride Turkish growth but said that currently “exporters underestimate the opportunities in Turkey.”
The Dutch bank's assessment was a turnaround from European attitudes regarding investment in Turkey a decade ago, when a slower rate of growth and massive currency devaluation made the market at best murky for investment. The change of mentality has also been reflected in growing German business activity in the country.