There are very high expectations for the Turkish market and Turkey's economy in the coming years. It is already Europe's sixth and the world's 17th largest economy. Although it suffered a setback at the end of 2008 and into 2009, just the same as the rest of the world, it quickly found its footing in 2010. Peripheral Europe was hit very hard by the financial crisis and subsequent recession. However, Turkey's downturn was less pronounced than most and its rebound has been far more impressive than even the most optimistic could have hoped for. In 2010, growth was expected to top 8% and output is already expected to have exceeded its pre-crisis levels, a rare milestone among its neighbouring European countries in particular. Growth in 2011 is expected to slow a little to 4.5%, however, domestic demand and imports should continue on an upward trajectory, positive news for businesses looking at Turkey as a potential market for their goods and investment.

One question mark hangs over the economy. The Turkish government has adopted a very aggressive dual-stimulative policy to ensure the country does not slip into a recession. On the one hand, it continues to lower interest rates, while on the other, it ups the reserve requirements on domestic banks to block too enthusiastic domestic loan demands. The policy has spooked markets that are finding it hard to rationalise interest rate cuts when growth is booming.

Turkey's ongoing EU accession talks are driving much of the modernisation in the country as well as the generally sound macroprudential policies adopted by the government. The country offers a market of over 70m people and acts as springboard to the Middle East as well as Central and Eastern Europe.

Over 1600 UK companies currently do business in Turkey. The UK is Turkey's fourth largest source of imports from the EU with a value of £4bn ($6.5bn). There are a vast array of potential markets that UK businesses can target. Defence is just one of the target areas with great potential. Turkey is the eighth top importer of defence equipment and is one of UKTI DSO priority markets. Turkish defence equipment expenditure is approximately £2.5bn ($4bn) a year. Turkey offers a number of incentive zones to encourage businesses into the country.

And of course, Turkey is a big country, over 300,000 square miles separated into seven regions bordering seven countries, with sea access to many more.

OPPORTUNITIES

Turkey offers massive potential for businesses prepared to do their research and get to know the market. Some of the key areas are:

• Defence - Turkey's Defence Minister stated that Turkey allocated 1.9% of its national income to defence and security expenditure in 2009.
• Ports - for the last 10 years over 85% of Turkish international trade has been transported by sea.
• Healthcare - in 2009 Turkey was rated as the 16th largest producer of pharmaceuticals in the world and also sixth largest pharmaceuticals market in Europe.
• There are also excellent opportunities in construction, ICT, agri-business, water, environmental and the marine sector.