Economic relations between Estonia and Turkey are good and marked by stable development. Business people in Estonia are interested in the opportunities offered by Turkey’s size, geographical position and lively economic environment. Turkish business people have discovered Estonia’s innovative economic environment, IT capabilities and favourable conditions for establishing start-ups.
Estonia’s e-residency programme is popular in Turkey: 1160 citizens of the country have already become e-residents, 270 of whom have set up their own companies in Estonia.
Trade between the two countries grew significantly after Estonia joined the European Union: exports to Turkey increased five-fold from 2004-2008. Trade was impacted by the global financial crisis in 2009, when both export and import volumes decreased substantially. However, trade grew again from 2010-2013. Estonia’s trade with Turkey has maintained a positive balance since 2004.
In 2017 Turkey was Estonia’s 19th biggest trading partner overall, with almost 265 million euros in turnover (a 1% share of all trade). It was ranked 16th among Estonia’s export partners and 22nd among its import partners.
Trade in goods between Estonia and Turkey 2012-2017 (million euros)
|Year||Exports||Share %||Imports||Share %|
Exports to Turkey
Having decreased slightly in 2015, Estonian exports grew by more than 20% in 2016. Further growth (+44%) continued in 2017, when the export volume reached almost 172 million euros. This growth in exports was led primarily by two goods groups: metals and metal products; and machinery and equipment. The share of goods of Estonian origin in exports also grew, from 67% in 2013 to an average of 82% in subsequent years.
The main export to Turkey is metals and metal products, forming 73% of all exports to the country in 2017. The primary export items are scrap and residue from cast iron and steel and unwrought lead. Ranked second among export items are machinery and equipment (transformers and inductors) at 11%. Also exported are precious metals (scrap and residue, as well as gold, 7%), chemical products (3%) and animal products (live cattle, 2%).
Imports from Turkey
The increase in imports in 2016 and 2017 was due to the Port of Tallinn purchasing passenger ferries, as a result of which the main import items were means of transport (43% of all imports). In addition to the ferries, motor vehicles and their parts were imported for the carriage of goods, and cars were also imported. The second-biggest import item was textile products (used clothing, cotton, special fabrics and bed linen, 22%). Metals and metal products (9%) and machinery and equipment (9%) are also imported from Turkey.
According to the data of the Bank of Estonia, a total of 8.2 million euros had been directly invested in Estonia from Turkey by the end of 2017, representing annual growth of 0.4 million euros. These investments were made in a variety of sectors: water supply and sewerage; wholesale and retail trade; transportation and warehousing; accommodation and catering; information and communications; financial and insurance-related activities; real estate; professional, scientific and technological activities; administrative and support services; and education. According to the data of the Commercial Register, 89 companies with Turkish involvement had been registered in Estonia by May 2017.
In 2018 the Gaziantep-based company Akinal Sentetik Tekstil was awarded the title of Most Outstanding Foreign Investor in Estonia. The company established Aston Synthetics OÜ, a firm with 40 employees that produces synthetic fabric, in Nehatu Industrial Park.
By the end of 2017, Estonian direct investments in Turkey amounted to 2.3 million euros, having decreased somewhat (by 94,000 euros year-on-year). Investments were made in wholesale and retail trade; the information and communications sector; and real estate.
In 2014 and 2015 an average of 6500 Turkish tourists stayed in accommodation establishments in Estonia. Interest in the country grew slightly in 2016, with almost 7000 staying here during the year. The same figure increased again in 2017, reaching 7500. Apart from Tallinn, popular destinations were Tartu, Pärnu and Ida-Viru counties.
Turkish Airlines, the country’s national carrier, launched direct flights between Tallinn and Istanbul on 11 June 2013.