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 Economy

Overview of monthly data

Unemployment rate descended to 8.8%
The unemployment rate has dropped to the lowest level since January 2005. According to the data provided by the Turkish Statistical Institute (TUIK), the unemployment rate decreased to 8.8 % in May within the period of April, May and June. The unemployment rate was 9.2% within the same period of the previous year and 9.9% in April. The rate of participation in the work force decreased to 48.6% in May and the number of unemployed was 2.2 million people with a decrease of 79,000. The number of the employed has increased by 139,000 compared to the same period of the last year and reached 22.86 million. The unemployment rate in urban areas has become 11 % with a decrease of 0.9% and in rural areas is 5.7 % with an increase of 0.2 %. Non-agriculture unemployment rate has dropped to 11.5 % with a decrease of 1%, compared to the same period of the previous year. 28.4% of those employed have been employed in agriculture, 18.7 % in industry, 5.8 % in construction and 47.1% in the services sector. Compared to the same period of the previous year, employment in agriculture sector has decreased by 3.6 percent and employment in services sector increased by 2.9 percent. 

Incentives were beneficial for poor provinces
“Incentives for poor provinces,” passed in February 2004, the coverage of which has been expanded despite the objections of IMF, has started to yield positive results. In the first 6 months of this year, the amount of investments subject to incentives in 49 provinces, covered by law, has increased by 53%. In terms of investments subject to incentives, Kahramanmaras has the lead with an investment of 333.4 million YTL, Duzce is second with 286.7 million YTL, Elazig is third with 186.6 million YTL and Osmaniye is fourth with 164.5 million YTL. There are no investments with incentive certificates for Hakkari and Kilis, which are under also the coverage of the law.

The trade volume with United State is expected to increase USD 20 billion
Ugur Terzioglu, the New Chairman of Turkish-American Businessmen Association (TABA), underlined that trade volume with the United States would be increased to 20 billion USD, from  10 billion USD and called on Turkish businessmen to take advantage of this opportunity. It is reported that sectors such as textiles, spare parts and industry, would be particularly considered in the September talks to be held in six states in the United States. Terzioglu stated that more than 35 businessmen from the United States would attend the meetings and that they wanted to purchase Turkish goods, sell goods to Turkey and make investments in Turkey.

2 million Euro support by UNDP to SMEs in Southeastern Anatolia Project Region
The United Nations Development Program has allocated a donation credit of a total of 2 million Euro to be used for SME projects in Adiyaman, Batman, Diyarbakir, Kilis, Mardin, Siirt, Sanliurfa, Sirnak. With this fund, financial support will be provided for such SMEs to decrease their input costs and to increase their sales, exports and employment capacities.

The sales profitability of the companies decreased by 1.4 points
The Istanbul Chamber of Commerce has published its "500 Great Industrial Establishments 2005 Report." The aggregate sales of the 500 largest institutions have reached 148.3 billion YTL, with an increase of 9.3% compared to the previous year. 9.57% of this amount, corresponding to 14.2 billion YTL, has been achieved by TUPRAS, the leader of the list. After the assignment of Erdemir to OYAK and Tupras to Koc, only Elektrik Uretim AS from the public sector could enter the top ten in fourth place. Toyota has realized the highest export, which amounts to 2.3 billionUSD. The average sales profitability of the companies, which was 6.1% in 2004 decreased to 4.7% in 2005, the lowest value since 2001.

Consumer goods imports have reached 18 billion USD
The sudden increase in imported consumption during the last 2 years in which the exchange rates remained low continued in the first half of this year. Considering the developments in the first half of the year, it is calculated that consumer goods imports for the year will reach 18 billion USD. An increase of 31% has been recorded in the importation of consumer goods in the first half of this year. The importation of consumer goods has increased by 1.9 billion USD, compared to the same period of the previous year.

Politics

Israel: Turkey must participate in peace force
Abdullah Gul, the Minister of Foreign Affairs and Deputy Prime Minister, has met Amir Peretz, the Minister of Defense of Israel, in Jerusalem to consider the United Nations Peace Force to be deployed in Lebanon. Stating that Hezbollah shall never be located along the border, “We request the Minister to send the Turkish Army to the region to participate in the international force.” After the meeting Mr. Gul said, “In the case that a contribution can be made to the stability, in the case that peace can be secured and Turkey can make a contribution, the issue will be considered with due care and due action is being taken."

Turkey sends troops to Lebanon
The bill, concerning deployment of troops in Lebanon, which has been an issue of concern for the public for a long time, has been considered by the assembly and accepted. In the voting, there were 340 votes in favor of and 192 votes against the bill. The opposition criticized, claiming that the bill came into the agenda, after the United States pushed the button in the Middle East, and Turkey would become engaged in the new Middle East project, announced by Condelezza Rice. Minister Abdullah Gul made a defense, stating that the action to be performed and not to be performed was clearly defined in the bill. The number of troops is not specified in the bill, which has a duration of 1 year.

Further Topics

Oil search in Black Sea
Hope for the oil and natural gas reserves beneath Black Sea attracts related firms to the region. TPAO, which explores for reserves with BP in the Eastern Black Sea and Toreador Stratic in Western Black Sea, has signed an agreement with Brazilian Petrobras company recently. Nestor Cunat Cervero, the director of Petrobas Company, said, "We are hopeful with respect to the Black Sea. We have eliminated the foreign dependency of Brazil with the oil we produced. Until now, we have succeeded in all our explorations. We will provide all support required to Turkey for this issue."

50 million Euro is expected from F1
Concerning August 25-27, during which Turkey hosted Formula 1 for the second time, the contributions of Formula 1 to the economy have been considered in a report titled “Formula 1 Economy Turkey Istanbul Grand Prix,” prepared by Deloitte. According to the report, 2 billion people in the world are expected to watch the event on television and as a result this will play a considerable role in the promotion of Turkey. It is also expected that 130,000 people will attend the race on Sunday. According to Deloitte, foreign audience numbers will reach 45,000 and 5,000 foreign and domestic VIP audience will watch the race from the Paddock Club. A total of 25,000 people from outside of Istanbul and 55,000 people from Istanbul will attend the races. The total attendance during the race week is expected to reach 240,000 people. It is expected that during the races the audience will spend a total of 43 million Euro, with a ticket revenue of 13.3 million Euro and accommodation expenditures, totaling 18.3 million Euro. Foreign spectators are likely to spend approximately 26.7 million Euro. (15.7 million Euro to hotels, 5.6 million Euro for tickets, 4.3 million Euro for catering) Together with the expenditures of 11 teams attending Formula 1 as racers, which will amount to 7 million Euro, the total expenditures in the organization will reach 50 million Euro.

Dogus Otomotive will sell Bentley cars
In a statement sent to the stock exchange by Dogus Otomotiv, which deals with automobile brands such as Audi, Seat, Skoda and Porsche, it is reported that a decision has been taken to sign an agreement of goodwill and then a distribution agreement, concerning the provision of marketing, sale and post-sale services of Bentley products in Turkey by Dogus Otomotiv. In the statement, it was reported that the agreement was signed yesterday.

Automotive Sector targets export of 13 billion USD 
The Turkish automotive supply industry will attend Frankfurt Automechanica Fair, which is one of the most important meetings of the world in its field, with 198 automotive spare parts producers showing their own products. Turkish automotive supply industry firms account for 70% of the exports to EU countries and will hold bilateral talks with European producers and investors. It is expected that current automotive exports of 11.7 billion USD will reach 13 billion USD this year.

Suzuki will produce automobiles in Turkey
Turkey, which has lost 1.2 billion USD automotive investment of South Korean Hyundai to the Czech Republic, is now on the agenda of Suzuki. Suzuki, a giant of the Japanese automotive industry, now plans to establish a production facility in Turkey in accordance with its global expansion targets. Suzuki has commenced preliminary studies for a facility, with a capacity of at least 100,000 cars. It is reported that Suzuki will make its final decision after studying the incentives and the foundation could be laid in early 2007. Aiming to be effective in the EU market, this investment of Suzuki will increase the pace of Turkey, which is on its way to becoming the 7th greatest producer in this market.

Gaziantep gives importance to R&D
Nejat Kocer, the Chairman of the Board of Directors of Gaziantep Chamber of Industry, said, “A fast change has occurred in the product range of Gaziantep industry, with the investments made in the R&D departments of our industrialists." Kocer added, “With this fast change, I believe that Gaziantep will be given the title "Innovative City," within the next few years."

Vestel Purchased Finlux
Vestel, which has a market share of 26% in the European TV market, has purchased Finlux, the most popular electronics brand of Scandinavian countries and Belgium, Luxembourg and the Netherlands. It is expected to increase the share of Finlux, which has operated under the structure of Nokia, in Scandinavian Countries to 15 %. Vestel, which has exported the first Finlux televisions, produced in its facilities in Manisa, will offer its product portfolio, consisting of TV, plasma, TFT, DVD recorder and player, satellite receiver and other digital boxes, to the European Market under the Finlux trademark.

Barclay’s Capital in Turkey
Now British Barclay’s capital is participating in the Turkish banking sector, which attracts the attention of the foreigners. Barclay’s Capital, the investment banking section of Barclays PLC company with a volume of approximately £ 1 trillion, has appointed Murat Talayhan as the president of the Turkish Branch.

Tourism cities will be established
Turkey has taken steps for the establishment of tourism cities, similar to the ones in Mallorca Island of Spain. The allocation tender process, for Cesme-Alacati tourism city, will commence on August 15. The persons, who will make investments within the framework of the projects, will be provided low interest loan, cheap electricity and water and privileges. It is expected that 90 billion USD investment will be made in the tourism cities, to be established. Oger Group, the Japanese, Russians and Spanish are interested in the projects.

50 million USD investment from Ata-Sancak
The Ata-Sancak partnership, which has parted with Koc Holding (who hired Acipayam Agricultural Establishment) now affiliated with the General Directorate of Agricultural Establishments for a term of 30 years, has laid the foundation of the large husbandry facility costing 50 million USD, on August 12. Saying that they would establish the greatest facility in Europe and sixth largest one in the world, the General Manager of Atasancak Acipayam Tarim Isletmesi San.Tic.A.S., Lutfi Kasli, also announced that they will both supply studs animals in Turkey and also export such animals.

Sales of motorcycles increased from 50,000 to 200,000 in 3 years
Motorcycle sales in Turkey increased in recent years, due to their convenience in traffic, low fuel consumption and convenient bank loans. Ferruh Tanay, the chairman of Motorcycle Industry Association said that the motorcycle sales had reached 200,000 and the figure was expected to reach 300,000 this year. The domestic revenue of the sector approached USD 1 billion.

FMCon News

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