In 2018, after nearly 20 years of strong growth, the Turkish economy came to an abrupt standstill due to a financial crisis. The coronavirus pandemic in the spring of 2020 was the deathblow to the slight recovery that had started in 2019. Despite the economic uncertainty, the traffic of Transuniverse Forwarding continues to grow and even reached record levels this year.
‘Turkey is one of the first countries served by Transuniverse. When I started working on that service nearly 30 years ago, the volumes for this country were quite small: half a truck load per week. After 2000, the Turkish economy grew rapidly, and our traffic developed as well. In 2013, this traffic got a new boost, thanks to the cooperation with the EKOL group, the market leader there. As a result, we had access to more capacity but also to a diffused distribution network in Turkey. Today, we have as many as 22 to 23 departures of groupage and full trucks per week,’ says Daisy Veldeman, Senior Traffic Operator Turkey at Transuniverse.
‘Of course, we felt the impact of the financial crisis in 2018, and we are currently feeling the impact of the pandemic. But now we are back at the right level, and the upward trend is continuing. In early December, we had already reached the volumes of the whole year of 2019, with 1,000 export trucks and 1,200 import trucks,’ Guy Van Assel, Senior Traffic Operator Turkey, adds.
‘In the past, the ratio of export to import was 60/40. Due to the huge devaluation of the Turkish lira, this ratio has been reversed. We aren’t complaining, though: export from Belgium – many parts and semimanufactures – remains dynamic. Traffic is almost in balance, which is favourable for supply to the customers,’ Guy says.
Daisy agrees that this near balance is positive for services. ‘It’s good for the capacity, so we’ve been able to attract new customers. Although it sometimes makes planning a bit more difficult: in the past, things were always busier in the same periods. Now, there are more fluctuations, which poses challenges.’
‘The current transit times are about six days on the road and eight to nine days intermodally. Since coronavirus, however, it has become more difficult to drive on schedule, for example because waiting times at the border may vary,’ Daisy says.
‘Incidentally, the intermodal connection with Turnkey is improving. Full trucks drive from Belgium to Cologne, where they get onto the train to Trieste in Italy. Then a ship takes them to the port of Yalova near Istanbul. This connection is slightly slower than by road, but it is much more sustainable. A growing number of companies are opting for this green solution,’ Guy explains.
An analysis of the Turkish economy reveals that traffic cannot be taken for granted. After 2000, Turkey enjoyed huge social and economic progress, making it a ‘higher-middle income country’. In 2018, the tide turned due to a financial crisis that brought on a recession. In 2019, a slight recovery set in, but in 2020 the pandemic dealt a new blow.
Before the financial crisis of 2018, the Turkish government had a long-term policy and implemented ambitious reforms in various fields, including foreign trade. As a result, Turkey grew closer to the EU, which was reflected in accelerated harmonisation of laws and regulations. Even the global crisis of 2008/2009 barely stemmed the upward trend.
Since 2018, however, Turkey has no longer been really prospering. In that year, inflation increased to a record high of almost 25%. Today, it officially stands at 12%, but experts believe it is higher. At 14%, unemployment is high, while youth unemployment is even dramatic: 26%. Despite the ‘new economic programme’ focused on promoting export and increasing domestic savings, the budget deficit is not under control. Furthermore, investments dropped; many foreign investors have lost confidence.
After heavy losses in August 2018, the Turkish lira recovered slightly but has been going down steadily since late 2019. In the meantime, it has dropped to a historic low: since August 2018, it has lost half of its value in comparison with the euro. Consequently, imports from Europe have become very expensive.
Although the devaluation could have helped exports, the figures went down. Also, its favourable effect on tourism was undone. The pandemic has discouraged tourists in large numbers. In other words, the two drivers of the Turkish economy are in shock. In 2020, GDP dropped by 5.0%, and this year it will end at around +5.0%. For 2022 it is expected to be +4.0% and for 2023 +3.5%.
Turkey in a nutshell
- Official name: Republic of Turkey
- Capital: Ankara (population: 3,517 million)
- Surface area: 783,562km² (26 times the size of Belgium)
- Population: 84.7 million
- Head of state: President Recep Tayyip Erdoğan
- Head of government: President Recep Tayyip Erdoğan
- Currency: Turkish lira (100 TRY = 6.4 EUR)
- Important cities: Istanbul (population 14.8 million), Ankara (population 3.5 million), İzmir (population 2.5 million), Bursa population 1.4 million), Adana (population 1.2 million)
- GDP: 761 billion USD (533 billion USD in Belgium)
- GDP/capita: 9,127 USD (46,414 USD in Belgium)
Source: Flanders Investment & Trade