Turkey Attracts $8.9 Billion FDI in January - July Period

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Researched by Industrial Info Resources (Sugar Land, Texas)--The foreign direct investment (FDI) to Turkey showed no signs of slowing, despite the eurozone crisis. Turkey attracted $8.9 billion of foreign direct investment in the first seven months of 2012, and 77.4% originated from Europe, according to Turkish Economy Ministry data.

The manufacturing sector received most of the FDI in the January - July period, totaling $3.4 billion. British investors emerged as the largest contributors to the sum of 8.9 billion with $1.96 billion, followed by Austrians with $1.42 billion and the Dutch with $800 million.

According to a statement, Economy Minister Zafer Caglayan said a recovery is expected in foreign direct investment inflows in the autumn, despite a slowdown in recent months. "The new incentive programme will trigger new FDI inflows to Turkey in the coming months," Caglayan said. The incentive mechanism offers certain sectors exemptions from customs and sales tax in order to boost production and help exports.

"Turkey's position as a popular destination for foreign investors remains unchanged despite global uncertainties," Caglayan noted. "Eleven of the Eurozone economies are yet to return to their pre-crisis state. Despite the grim outlook in Europe, continuation of the FDI inflow to the country is a success on Turkey's part."

Seperately, the uncertainty about the outlook for the global economy has led to a sharp fall in foreign investment by businesses, the Organization for Economic Cooperation and Development (OECD) said.

The OECD said it expects the value of mergers and acquisitions between companies based in different countries to fall to $675 billion this year from $1 trillion in 2011, a decline of 34%.

And it said companies have increasingly been selling their existing foreign assets. As a result, net international mergers and acquisitions (M&A)--the difference between new investments and sales of assets--will fall to $317 billion, its lowest level since 2004.

The regions in which inward M&A are projected to decline most sharply are Asia (-48%), North America (-39), and Europe (-29%). The M&A to Africa and the Middle East are expected to increase 67%. The bulk of this international investment in this region has been directed at the energy and mining sectors.

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