Reconciliation with Russia to create $10 bln value for Turkish economy in two years: Report

The report noted that Turkey is located in one of the world’s most risky regions and has not seen any calm periods since the first Gulf War in 1990. Since then, diplomatic turbulence with Russia, following the downing a Russian jet by Turkey last November, has been among the most troubling developments, the report stated. 

“We believe that the bilateral economic and trade ties between Turkey and Russia will improve in a short period of time after the current problems are resolved. This will create an additional contribution of around $4.5-5 billion to the Turkish economy annually, thanks to a rapid improvement in trade and tourism relations with Russia, totaling $10 billion of yields over the next two years,” said the report. 

These improving ties will also help Turkey finance its current account gap, it added. 

After months of disagreement, Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin agreed to revive their stalled bilateral relationship in their first direct contact on June 29, fueling hopes about restoring economic and trade ties. 

In the first four months of the year, Turkey’s exports to Russia dropped to $484.6 million, a 61.5 percent decrease compared to the same period of 2015. 

In May, Turkey saw dramatic declines mainly in tourism arrivals from Russia and Western countries amid rising security concerns and the diplomatic row with Russia, which was the second largest foreign tourist source for Turkey until recently.

The number of Russian tourists visiting Turkey declined by around 92 percent to 41,004 in May compared to the same month of 2015, according to official data.