Turkey has become one of the most important countries for foreign investors. With the new regulations for foreign investors in recent years, along with providing incentives and encouragement policies, the number of direct investments in Turkey has shown a serious increase. The first factor that foreign investors make when deciding to invest in a country is the course of the country’s economic stability and growth. As long as the country’s economy is balanced, the interest of foreign investors to make the country increases and thanks to the increasing investments, the economy strengthens and the Turkish Lira gains value. Here it is possible to talk about a double-sided gain. While foreign investors guarantee the return of their investments by investing in a country with a stable economy, the country’s economy also gets a brighter appearance by attracting foreign investments to the country. In the rest of our article, you can find information about investments in the light of macroeconomic factors and macro data.
What is Macroeconomics ?
Macroeconomics is the sub-topic of economics that examines the total sizes of total consumption, total production, total savings, total investment, total income (GNP) and employment and makes analysis about them. Unlike microeconomics, it works on macro balance analysis by taking the economy as a whole. Unemployment, inflation, total production and consumption, income distribution are considered as the main topics of macroeconomics.
What are Macroeconomic Indicators ?
If someone wants to be a successful investor in Turkish market, they should analyze and evaluate the macroeconomic indicators that affect economy well. Foreign investors benefit from macroeconomic data when investing in Turkey. The main macroeconomic factors affecting the economic balances of a country are given below under the headings.
GNP (Gross National Product) Data
GNP is one of the most important indicators that shows a country’s economy, the values of goods and services in the previous year and their place in the market. It is generally referred to as an approximate indicator. For this reason, many foreign investors are planning their investments according to GNP data, acting according to the reports in the period corresponding to the months before the announcement of GNP.
Retail Sales Data
The retail sales data which is published monthly has a great importance, especially for forex traders. This data shows consumers’ spending power. As the numbers increase, the expectation from the economy naturally increases. It initiates a positive waiting process that extends to the increase in GNP. Increasing spending power is considered as a key factor in paving the way for new investments.
Labor Market Data
Labor Market Data plays an important role in financial markets. Unemployment rates are at the core of labor market data. The unemployment rate is defined as the numerical equivalent of people who do not have a job but are in the search process. The steady increase in the unemployment rate is a sign of the bad trend of the country’s economy and affects the markets negatively. While it causes changes in exchange rate signals, as unemployment increases, exchange rate value weakens. This situation causes slow movement in decision making mechanisms of foreign investors.
Exchange Rate and Effect of Interests
Every foreign investor knows that rising interest rates are an indicator that will positively affect their investments. Capitals circulating in the international market can be transferred to the strengthening currency rapidly and contribute to the appreciation of the economy. Likewise, low interest rates make it easier to lose value. Exchange rates and the effects of interest rates are carefully monitored by foreign investors and investment can affect their motivation positively or negatively.
Actual Macroeconomic Data of Turkey
According to TÜİK and TCMB Data, GDP increased by 14.9% in 2019 compared to the previous year and reached 4.28 trillion TL in January. Additionally 1.84% increase was realized. Unemployment rate was realized as 13.3% in November 2019.