Turkey Multifunctional Peripherals 2005-2009 Forecast and 2004 Vendor Shares

The Turkish economy expanded in 2004, with GDP rising 8.1% during the year. This growth was slightly below expectations due to the poor performance of the agriculture sector, particularly in the third quarter. Driving the economy were strong private consumption and greater private-sector investment in machinery and equipment. The sharp rise in consumer spending was triggered by the release of pent-up demand, supported by the strength of the Turkish lira and increased consumer lending. The government enjoyed successful results in the disinflation process, again thanks to the strength of the lira as well as a significant improvement in productivity.

A surge in domestic demand and higher international oil prices pushed up imports in 2004, offsetting the benefits of higher exports and a record tourism season. As a result, the current account balance stood -5.0% of GDP last year, compared to -2.9% in 2003. FDI was up slightly at 0.7% of GDP in 2004, and should continue to grow in the coming years. While in 2003 the Foreign Direct Investment Law was passed, removing most restrictions on foreign investors, continued concerns about the efficiency and objectivity of the Turkish bureaucracy and legal system have meant that overall, direct foreign investment in the country remains low.