Foreign investors worried over 2012

ISTANBUL - Anatolia News Agency

An employee works on an ignition coil at a plant in the province of İzmir owned by Esba, the local firm which produces parts for global carmakers. DHA photo

Nearly half of the foreign investors in the International Investors Association of Turkey’s (YASED) recent survey believe that the investment environment in Turkey will deteriorate and some 35 percent believe there will be no change in 2012.

However, in the absence of radical changes in capital investment into Turkey due to problems in the global economy, Turkey will achieve its growth targets, according to a separate study by the Istanbul Chamber of Industry. 

The YASED survey revealed that 76 percent of international investors expected the global economic environment to worsen in 2012 in terms of global investment. Some 45 percent expected Turkey’s investment environment would worsen. When asked whether they would consider investing in Turkey in the coming period, 43 percent said “yes,” 32 percent said “no” and 25 percent said they did not know. 

According to the survey, international investors believe that the three greatest obstacles to investing in Turkey are “legal protection for investors,” “economic sustainability,” and “tax and incentive schemes.” 

Factors which could curb foreign investment in Turkey, as highlighted by the survey, are the deterioration in the global financial markets, a slowdown in the implementation of Turkey’s structural reforms, the government’s inability to reduce Turkey’s current national deficit, political instability, unsustainable growth and bottlenecks in Turkey’s EU accession process. 

At least 62 percent of those surveyed predict that there will be $10 billion to 15 billion in foreign direct investment in Turkey in 2012, but 35 percent expect investments to be less than $10 billion. 

“Turkey’s could achieve its 4 percent 2012 growth target if the country continues to receive capital investment and if the industrial sector continues to do its part,” the president of Istanbul’s Chamber of Commerce (İSO) Executive Board, Tanıl Küçük, said in reference to the İSO’s 2012 economic expectations survey.

“The locomotive behind growth is the industrial sector. In order to achieve success in 2012, we have to support our industrial sector and increase our competitiveness,” Küçük said. 

Despite painting an optimistic outlook for 2012 growth, Küçük said, “There could be looming obstacles facing Turkey’s industrial sector in 2012, such as a possible slowdown in demand, an increase in interest rates and the continued depreciation of the Turkish Lira.”