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|
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)|
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