bne IntelliNews -

Turkey took in $7.4bn worth of foreign direct investment (FDI) in January-July, according to the Economy Ministry’s latest FDI bulletin, putting it on track for $12bn by the end of this year, which would be the best result for four years.

In 2012, 2013 and 2014, Turkey attracted $10.8bn, $9.9bn and $8.7bn respectively, but even this year’s better-than-expected result is still way off the record $19.1bn the country attracted in 2007 at the height of its economic boom.

Still, the money is more than welcome to help fund the country’s perennial current account deficit. As a major energy importer, Turkey has to fund a current account deficit that has swung from $75bn in 2011 to $47bn in 2014.

And there is good news on this front too. Turkey is one of the big winners from the recent collapse in oil prices, which has helped the current account deficit fall sharply this year to $25.4bn in the first seven months. Improvement in the current account balance is expected to continue in the forthcoming period, Turkish Central Bank Governor Erdem Basci commented on September 30.

Still, not all is rosy. The Turkish lira has tumbled this year, losing about a third of its value against the dollar to fall through the psychologically important TRY3 to the dollar. Moreover, the falling currency hasn’t curbed imports as much as expected because the generally glum economic mood in the rest of Europe has hit Turkish exports. These trade dynamics combined to undo some of the benefits of the lower energy prices, slowing the fall in the country’s current account deficit, Basci commented on September 29.

Head of International Investors’ Association (YASED), Ahmet Erdem, said on June 24 that Turkey was expected to attract a total of $12bn worth of FDI this year with energy, fast moving consumer goods, food & drink, and finance industries taking the lion’s share.

The profile of Turkey’s biggest investors has changed in recent years. Spain came out top as by far Turkey’s largest investor in January-July with $2.1bn, while the Netherlands (as a European tax haven for money from all over the world) has still the largest share in overall FDI into Turkey as of end-July with a total stock of investment of $20.5bn.

The other big investors so far this year were Russia and Belgium, which invested $753mn and $721mn respectively in the first seven months of this year. US investment has been slowing for the past four years, though it remains the third largest FDI investor into Turkey after Austria and the Netherlands in terms of total FDI stock with $9.3bn.