Turkey’s 2015 FDI inflows far from past performance

By bne IntelliNews October 6, 2015

Turkey, desperately dependent on capital inflows to finance its chronic current account deficit, attracted $7.4mn worth FDI in January-July, according to Economy Ministry’s latest FDI bulletin. 2015 figure represents a 25% y/y rise, however, Turkey does not promise a strong performance shown in 2007 with $19.1bn or $16.1bn in 2011.

Turkey's FDI and CA Deficit Figures
  FDI CA Deficit FDI/CA Def
2005 8.5 21.4 40%
2006 17.6 31.8 55%
2007 19.1 37.8 51%
2008 14.7 40.2 37%
2009 6.3 12.0 52%
2010 6.3 45.3 14%
2011 16.1 75.0 22%
2012 10.8 48.5 22%
2013 9.9 64.7 15%
2014 8.7 46.5 19%
Jan-Jul/2015 7.4 25.4 29%

source: tcmb

Between 2012 and 2014, Turkey could just attracted annual FDIs of $10.8bn, $9.9bn and $8.7bn, respectively, and it seems 2015 figures will come better despite on-going political and regional tension.

The country’s current account deficit, on the other hand, is on declining trend due to favourable energy prices. The improvement in the current account balance is expected to continue in the forthcoming period, Turkish Central Bank Governor Erdem Basci commented on September 30. Significant decline in oil prices provides favorable conditions to Turkey in order to narrow external imbalances, however, relatively limited declines in imports and unfavorable conditions in the export markets delays constant decreases in the country’s current account deficit, Basci has previously commented on September 29.

Spain was Turkey’s largest investor in January-July while the Netherlands has still largest share in overall FDI into Turkey as of end-July.

Head of International Investors’ Association (YASED), Ahmet Erdem, said on June 24 that Turkey was expected to attract $12bn worth of FDI this year. Energy, fast moving consumer goods, food & drink, and finance industries would take the lion’s share of foreign direct investments in 2015, said Erdem, adding that Turkey was expected to retain its 1% share in global FDI inflows.

Turkey's Largest Investors (USD mn)
    2010 2011 2012 2013 2014 Jan-Jul/2015 Total Share
1 Netherlands  486       1,425       1,381       918       2,017       636       20,508      16.0%
2 Austria  1,584       2,418       1,519       647       50       32       9,343      7.3%
3 USA  323       1,403       439       326       325       136       9,318      7.3%
4 Germany  597       665       491       1,968       693       193       8,344      6.5%
5 UK  245       906       2,044       300       1,049       285       8,286      6.5%
6 Belgium  48       1,495       39       60       41       721       8,143      6.4%
7 Luxemburg  311       562       1,186       278       555       300       7,714      6.0%
8 Spain  205       2,251       193       506       76       2,137       7,061      5.5%
9 Greece  436       111       58       68       101       57       6,889      5.4%
10 France  623       999       86       217       280       112       6,703      5.2%
11 Russia  2       762       11       875       730       753       4,936      3.9%
12 UAE  104       89       52       176       115       28       4,075      3.2%
13 Azerbaijan  12       1,266       338       803       718       283       3,525      2.8%
14 Italy  25       111       154       146       490       108       2,808      2.2%
15 Switzerland  123       233       454       204       154       97       2,018      1.6%
16 Saudi Arabia  39       8       439       39       33       14       1,957      1.5%
17 Japan  347       231       106       439       212       215       1,726      1.3%
18 Kuwait  193       43       271       185       234       24       1,611      1.3%
19 Lebanon  29       45       315       573       35       -         1,133      0.9%
20 Qatar  52       50       46       469       8       350       1,101      0.9%
  Total  6,256       16,137       10,759       9,866       8,708       7,413       127,921      100.0%
source: tcmb

 

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