Politically and economically, Turkey presents a mixed picture.

On the one hand an erratic policy with 20 percent inflation and a dizzying devaluation of the lira, on the other hand a high growth rate and rising export earnings.

Andreas Mihm

Business correspondent for Austria, East-Central and Southeastern Europe and Turkey based in Vienna.

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The dichotomy is also evident in the results of the most recent survey of the German companies operating there by the German-Turkish Chamber of Foreign Trade.

Germany is Turkey's largest trading partner and its most important export destination.

Perhaps the result can be summarized as follows: Concerning in the short term, optimistic in the long term.

The economic assessments are particularly negative.

Despite a growth rate in gross domestic product of 21.7 percent in the second quarter, the companies are skeptical.

One in three expects it to get worse, 40 percent hope it will stay the way it is.

Corona-related restrictions on travel, gaps in logistics and supply chains and postponed investments due to the corona pandemic are slowing growth.

Chamber President Markus Slevogt sees “economic and political question marks” for the next twelve to 18 months.

Elections will take place in Turkey by 2023 at the latest.

President Recep Tayyip Erdogan, who is under pressure, wants to be confirmed in office.

Opportunities to enter the market cheaply

The companies organized in the Chamber, on behalf of 7,500 German companies operating in Turkey, complain about the risks of exchange rate developments, fluctuating economic and political framework conditions and the explosion in raw material and energy costs as the greatest business risks.

But they don't let that spoil the good mood about a good business situation and hopeful prospects.

The reason is that most of the German companies operating in Turkey work for export.

The domestic inflation, which worries the population, is more likely to benefit exporters, as the costs billed in lira, measured in euros and dollars, are falling.

The positive assessment encourages companies to invest more, as Thilo Pahl, executive board member of the AHK Turkey, said.

The latest example is the pharmaceutical company Boehringer Ingelheim, which wants to set up a joint production for 150 million euros with Abdi Ibrahim Pharmaceuticals, the largest manufacturer of pharmaceuticals in Turkey.

Volkswagen canceled a billion-dollar investment last year.

The expansion of production goes hand in hand with the search for professionally qualified workers, which, according to Slevogt, is also a problem in Turkey.

Since the depreciation of the lira, against the euro alone, has lost 28 percent in the past twelve months, and since Turkish real estate, factories and stocks have become cheaper, there are also opportunities for investors to enter the market cheaply.

Slevogt referred to the example of the Spanish bank BBVA, which wants to completely take over the Turkish bank Garanti for 2.25 billion euros.