FDI inflow into Turkey may exceed projections

Dünya – The recent upgrade of Turkey’s credit rating to ‘investment grade’ is an important step towards increasing the country’s share in global foreign direct investment (FDI) traffic, according to a statement issued by the International Investors Association of Turkey (YASED).

“The upgrade of Turkey's government bond ratings to Baa3 from Ba1 by Moody's Investors Service is undoubtedly a very crucial step in increasing Turkey’s share of the global FDI inflow from 1 percent to 3 percent and enter the top 10 FDI recipients in the long term.”, YASED statement read.

Turkey now meets the requirements set by international investment funds as to have at least two ‘investment grade’ ratings from the three main credit rating agencies. Turkey recently received a rating upgrade from Moody’s after Fitch elevated the country to ‘investment grade’ late last year, leaving only Standard & Poor’s to keep the country one-notch below the coveted status.

According to YASED forecast Turkey is expected to receive USD 15-20 billion of FDI in 2013, a figure that may well be exceeded on the back of the recent rating boost.

Mergers and acquisitions (M&A) will also be positively affected by the Moody’s decision with the target volume of USD 25 billion in transactions very likely to be revised upwards by as much as USD 5 billion, according to auditing and consultancy firm Ernst & Young (E&Y). Musfik Cantekinler, the Head of Corporate Finance Division of E&Y, told news agencies that the recent upgrade, as well as future upgrades, is expected to increase Turkey’s appeal in both FDI and M&A terms in the coming years.

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