YASED survey sees $12 bln in FDI to Turkey in second half of 2011

Turkey is expected to attract some $12 billion in foreign direct investment (FDI) from July through December 2011, a survey released by the International Investors Association (YASED) showed on Tuesday. YASED announced the results of their Barometer Survey, which reflects the views of international investors in Turkey for the second half of the year, at a press meeting Tuesday in İstanbul.

YASED Chairman İzzet Karaca

YASED Chairman İzzet Karaca

According to the survey, 59 percent of YASED members expect $9 billion to $12 billion in FDI to enter Turkey in the second half of 2011. Thirty-seven percent of investors believe the economic environment for FDI in Turkey will improve, whereas only 9 percent hold the same opinion when it comes to the worldwide economic environment, according to the survey.The survey was carried out in July, when 48 percent of investors polled said they plan on making new investments from July through December. Investors were asked to indicate the amount of total investment they would make. Seventeen percent of them indicated they plan on investing more than $100 million in Turkey. On top of that, 8 percent said they would invest between $50 and $100 million, 12 percent said $25 to $50 million and 63 percent said they will invest less than $25 million in the given period.

YASED Chairman İzzet Karaca said the results show foreign investors are optimistic about the improvement of laws, regulations and intellectual property rights in Turkey but have concerns over possible new financial crises in international markets that could affect the country’s economic stability. He said the survey conducted in July revealed a dramatic change in the thinking of investors as 72 percent of them thought at the time that the worldwide economic environment would worsen in the next six months. This number stood at 27 percent when the same survey was carried out in the first half of the year.

YASED Secretary-General Özlem Özyiğit said 55 percent of investors expect a slowdown in the Turkish economy in line with problems in the world economy. They also expect Turkish inflation will increase. Interest rates in Turkey are expected to remain stable according to 49 percent of YASED members, and exchange rates are expected to increase, say 40 percent of the respondents.

Political instability is the least of the concerns among participants, who believe the government should improve tax and incentive policies as well as provide legal assurances for investors and combat the unregistered economy. Investors indicated that the government should give priority to reducing the current account deficit as well as to working on structural reforms and sustainable growth in the second half of 2011. Unemployment was the number one concern among participants in the previous survey. Investors, however, placed unemployment as number five on the list of major concerns regarding the Turkish economy.

Participants believe the energy sector will attract most of the investors and that it will be followed by financial services, the health sector, the automotive and the food and agriculture sector. Most investors are expected to be from Europe and the US.

YASED was established in 1980 and is the most recognized association of international investors in Turkey.

 

11 October 2011, Tuesday / TODAY’S ZAMAN, İSTANBUL