Results of the Latest YASED Barometer Survey Sheds Light on 2010
International Investors do not expect the impacts of the crisis
to end before 2011
The representative of the leading international investors in Turkey, YASED International Investors Association, has disclosed the results of its first Barometer Survey of 2010. According to the survey, which takes the pulse of YASED members regularly every six months, 42% of international investors in Turkey plan new investments and 47% consider that Turkey’s economic growth will speed up in the next six months period. Investors however indicate that local political turmoil would be the No: 1 development that would adversely affect international direct investments. Together with the first YASED Barometer Survey of 2010, “YASED INVESTORS’ EXPECTATION INDEX” concluded from the answers given to Barometer Surveys has been shared for the first time with the public too.
YASED Barometer Survey, which reflects the views of international investors in Turkey on the economic and political developments that affect their investment decisions, has revealed striking results. According to the results of the Barometer Survey unveiled by Chairman Piraye Antika, the Board Members and Secretary General Mustafa Alper by a press meeting; 42% of international investors consider making new investments in 2010.
YASED members, according to the Survey, have realized their production and turnover targets to a great extent in the second 6-month period of 2009. In the second half of the previous year, the members have accomplished their turnover targets by 53% and their production targets by 55%. Whereas 37% of the members have declared that their profitability rates have remained below their targets, the ratio of those who pronounced that their exports fell below their targets has been 39%. While 44% of the international investors have indicated that their employee numbers have not changed during the last 6-month period, 34% have reported decreases and 22% have affirmed increases. As for the coming 6-month period; whereas 54% of the investors expect no change in their employee numbers, 17% expect decreases and 29% expect increases.
World economic growth to remain stable
According to the Barometer Survey, a significant 60% of international investors in Turkey consider that economic growth will remain stable worldwide in the next 6 months. As for their expectations on Turkey’s economy, 47% of investors consider that economic growth in Turkey will “accelerate” during this period.
YASED Barometer Survey also makes public investors’ forecasts on key economic indicators. According to the Survey, whereas 64% of international investors expect the inflation rate and 53% expect interest rates to remain stable in the coming 6 months, 52% expect the exchange rates to run parallel to the inflation rate in 2010.
The biggest barrier to investment is “Local Political Turmoil”
The main enduring barriers to international direct investments in Turkey, according to YASED members are; “Legal framework and its enforcement” by 57%, “Unregistered economy” by 46% and “Taxes and incentives” by 45%. The members also sort in decreasing order; “Local political turmoil” by 21%, “New economic fluctuations in the international markets” by 20.5%, and “Local economic fluctuations” by 19.1% as the potential developments that might affect international direct investments most adversely in Turkey during the next 6 months.
Again, the 3 issues the government should prioritize in the term ahead, according to members are, “Unemployment” by 71%, “Structural Reforms” by 66% and “Sustainable growth” by 51%. The most significant legal amendments our members are looking forward to in the short term are in order of precedence; “Turkish Commercial Code”, “Income Tax Law”, and “Regulations on Energy Market” as indicated in the previous surveys as well.
This year, the result of YASED Investors’ Expectation Index, derived from YASED Barometer Surveys is shared with the public for the first time. The Index was prepared by Assoc. Prof. Erhan Aslanoğlu, Assist. Prof. Dr. Sadullah Çelik and Prof. Dr. Hurşit Güneş on behalf of YASED, from the data based on the answers given to some particular questions (economic stability, political stability, taxes and incentives, legal framework, intellectual property rights, financial environment, bureaucratic barriers, unregistered economy, corruption, fair competition) of YASED Barometer Survey since 2002.
While unveiling the results of YASED Investors’ Expectation Index, Prof Dr. Hurşit Güneş said, “YASED Investors’ Expectation Index has dropped to 70.10 in the first quarter of the 2010 by a 3.3% decrease on the previous quarter. The index that had exhibited a drop in the second half of 2008 on account of the global crisis, had started recovering in the second half of 2009. Expansionary monetary and financial policies implemented in many countries of the world as well as Turkey, and above all the U.S., appears to be the basic cause of this recovery. We see that this increase has lost momentum in Q1 2010, and the index has experienced a drop, however not to the previous levels”.
Prof. Dr. Güneş gave the following information on the new Index: “YASED - Investors’ Expectation Index reflects the expectations for the next term of foreign investors operating in Turkey. The 10 questions that constitute the foundation of the Index involve the economic and non-economic aspects of Turkey’s investment environment. Investors’ economic and political expectations for the term ahead of us for instance or taxes, incentives, bureaucratic implementations, are among the Index questions. When we look at YASED - Investors’ Expectation Index for answers which can be followed up in depth, we see that the drop in Q1 2010 greatly stems from worsening expectations on political and further worsening expectations on taxes and incentives. We see that there is no worsening in the expectations as to the general trend of the economy; there is even a slight improvement. We notice from previous data that YASED - Investors’ Expectation Index is closely correlated with economic growth. YASED Index, in this context strongly indicates that political stability might become one of the key determinants of economic growth in the coming term.”
“YASED Investors’ Expectation Index” will from now on be publicly announced every six months, specifically on 5 April and 5 October and will simultaneously be posted on YASED’s web site (www.yased.org.tr).
Please click here for the details about the results of YASED Barometer Survey and Investors’ Expectation Index >>>