Turkey

The flow of foreign direct investment into Turkey picked up in the second half of 2013, and while the full-year figures were down, it appears external factors, rather than any cooling of the local economy, were the primary cause.

Recent acquisitions of Turkish agribusiness interests by Gulf investors have highlighted the sector’s opportunities for expansion in the wider region. However, further development of the industry faces challenges, including the need for additional farm labourers.

Widespread drought is affecting Turkey’s agriculture sector, with the 2014 wheat harvest at particular risk of underperforming and warnings of crop failures in a number of grain-growing regions.

Additional restrictions on consumer lending and higher interest rates could mean a slowdown in growth for Turkey’s banks, although the sector should have the resilience to ride out any shockwaves.

The first link in Turkey’s high-speed rail system is set to open in 2014, part of a broader effort by the government to make significant improvements to transport infrastructure in time for the republic’s centenary in 2023.

As Turkey looks to diversify its sources of natural gas, one option that is coming closer to reality is a deal with the Kurdistan Regional Government to build an oil and gas pipeline from northern Iraq. While this link would help consolidate Turkey’s position a regional energy corridor, it risks upsetting relations with Iraq.