HSBC: Türkiye Positioned to Gain from Global Reconstruction and Economic Shifts

Türkiye’s economic fundamentals remain strong, and the country is strategically poised to benefit from geopolitical realignments and post-conflict reconstruction efforts, according to a new report by HSBC analysts.

Strategic Geography Puts Türkiye at Heart of Reconstruction Opportunity

HSBC emphasized that Türkiye’s geographic position near Ukraine, Gaza, Syria, and Lebanon makes it a likely beneficiary of regional rebuilding projects once ceasefires or peace agreements are reached.

“Lebanon’s post-war reconstruction could cost around $25 billion, while Syria’s needs range from $400 billion to $1 trillion,” the report stated.
“Türkiye, which supplied 15% of Syria’s cement imports in 2010, now supplies only 4%. A revival of demand could boost the cement and steel sectors.”

They also noted Türkiye’s balanced diplomatic relations with both Russia and Ukraine, positioning it to participate in World Bank–backed reconstruction programs in Ukraine, estimated at over $500 billion.

Defense and Aerospace Exports on the Rise

Türkiye’s defense sector is another area of promise. Defense and aerospace exports jumped 29% in 2024, reaching $7.1 billion, amid growing European defense spending.

The EU’s push to expand military budgets in response to global conflicts is expected to benefit Turkish defense contractors, making the industry a strategic growth driver.

HSBC: Turkish Equities Still Attractive Despite Volatility

Despite ongoing economic and political challenges, HSBC reiterated its bullish stance on Turkish equities, citing improved monetary discipline and sectoral momentum.

“We believe the core long-term catalyst for Turkish equities remains intact: a strong commitment to conventional economic policy. We see opportunities amid the volatility and remain overweight in Türkiye,” analysts wrote.

Tourism and Aviation Sectors Set to Rebound

Türkiye’s tourism sector is another area where HSBC sees growth potential. The country expects to host 65 million visitors in 2025, up from 62.3 million in 2024.

Aviation stocks were named as a top pick by HSBC, thanks to:

• A robust domestic travel market

• Potential reopening of key source markets, including Russia, Ukraine, and Israel

• Growing foreign inbound traffic and increased global connectivity