Portfolio, FDI inflows likely to rise this year: DEİK’s Olpak
ISTANBUL
Both portfolio inflows and foreign direct investments (FDI) into Türkiye are expected to increase this year, says Nail Olpak, the president of the Foreign Economic Relations Board (DEİK).
Confidence in the economy is increasing due to the decline in the country’s credit debt swaps (CDS) and rating upgrades, he said.
Türkiye has drawn $8.5 billion in FDI in the first 10 months of 2024, according to the latest available data. In 2023, FDI inflows into Türkiye amounted to around $11 billion.
Since 2002, Türkiye has attracted a total of $272 billion in FDI.
Olpak expects foreign interest to increase especially in the manufacturing industry, energy and renewable energy and finance sectors in the new year.
The performance of the economy, such as GDP growth and business activity, this year, will be similar to the one experienced in 2024, according to Olpak, who anticipates that interest rates will fall with the decline in inflation.
Thus, the problems of the businesses such as access to financing and high financing costs will be alleviated to some extent, he said.
“However, the expected reduction [in financing costs] will not come to very low levels which may relieve the businesses before the end of the year,” Olpak added.
The structural reforms to be implemented will have a positive impact on Türkiye’s economic and commercial activities with other countries, according to Olpak.
“Because these steps will both reinforce confidence in the economy and increase productivity and enable us to reach healthier and more balanced growth rates,” he said.
Despite the gains made under the government’s medium-term program, such as boosting confidence in the economy, lowering inflation and putting growth on a more stable footing, improvements are still needed in some other areas, according to Olpak.
Steps should be taken to eliminate rigidity in service inflation and to ensure that the improvement in expectations continues at a faster pace, he said.
“Moreover, the pressure from the [economic] program on the industry sector is becoming more palpable,” he stressed.
Olpak calls for additional action for the industry sector, which recorded negative growth for the last two quarters, to help the sector not to lose its international competitiveness.
