* Q1 growth seen low due to base effects, recovery from Q2
* FDI seen above $15 billion this year
* Middle East turmoil presents risks to economy
* Government working on automotive, tablet PC projects
(Adds quotes, details, background)
By Ozge Ozbilgin and Asli Kandemir
ANKARA, April 4 (Reuters) – The Turkish economy may grow
more than five percent this year, Industry Minister Nihat Ergun
told Reuters, giving a bullish assessment on the economic
outlook well in excess of analysts’ expectations.
Ergun also said foreign direct investment (FDI) in the major
emerging market economy was this year expected to exceed $15
billion, including real estate sales. Last year, FDI amounted to
some $15.9 billion.
The minister made the comments in the light of gross
domestic product figures on Monday showing Turkey’s economy was
Europe’s fastest growing last year with expansion of 8.5
percent.
Growth is expected to slow sharply this year, with analysts
estimating expansion below 3 percent and the IMF expecting 2.3
percent growth. Ergun’s forecast far exceeded those and a 4
percent prediction in the government’s medium-term programme.
“It would not be a surprise to see growth above 5 percent
this year,” the minister said in an interview late on Tuesday,
but added that the economy was subject to risks generated by
strife in the Middle East.
“The effects of the Middle East turmoil on crude oil prices
represent a risk element for the Turkish economy. Parallel to
this, we are also affected by any excessive forex volatility,”
Ergun said.
“Our economy has the dynamism to compensate for these risk
factors,” he said, adding growth will be low but not negative in
the first quarter due to base effects before recovering from the
second quarter.
“We have established macroeconomic balances, our financial
system is good, we are careful on budget balances, fiscal
discipline is being maintained. All this gives investors
confidence,” Ergun said.
Besides the regional risks, Ergun said there were also some
positive messages from countries such as China, the United
States and India.
“There is plentiful liquidity in some places and Turkey has
a good potential to turn this into investment,” he said.
AUTOMOTIVE, COMPUTER PROJECTS
Commenting on the Turkish government’s aim to produce a
fully domestic car brand, Ergun said Turkish conglomerate Koc
Holding, Fiat , Ford,
Renault and Hyundai had expressed interest
in the project.
“(Domestic automotive) sector sales have reached 600,000
units. The domestic automotive market could reach one million
(units) within five years. The rapidly growing domestic market
is one of the reasons for saying to the sector ‘build a local
brand’,” he said.
“Good domestic vehicle production could take a 100,000 unit
share of the market,” he added.
He also said the government’s planned $7-8 billion project
to produce tablet computers for schools, dubbed the FATIH
Project, had attracted interest from around 30 domestic and
foreign companies and consortiums.
The project envisages the sale of around 25 million
computers within 10 years, with production in Turkey and a high
proportion of local input.
Among companies to express an interest are Nokia,
Samsung , Intel, Sony, Sanyo,
Vestel, Arcelik, Casper and Exper.
(Reporting by Ozge Ozbilgin and Asli Kandemir; Writing by Daren
Butler; editing by Stephen Nisbet)
