Umbrella upturns: Capital inflow to Turkey down 73 percent

The results of the November 2015 balance of payments released last week have confirmed an ongoing trend: The foreign resource inflow that has been financing Turkey's growth for 12-13 years dropped radically in 2015, and this could be considered a sign of a new era rather than a temporary trend. A new climate has gone into effect and the growth paradigm based on foreign resource inflow has actually come to an end. 
However, on the same day, Deputy Prime Minister Mehmet ?im?ek publicized the revised Medium-Term Program (OVP) 2016-2019 targets, which revealed that the new facts of the new era were not particularly recognized.   

A 73 percent drop

The balance of payment data which covers foreign currency movements of the Jan.-Nov., 2015, period show that the total amount of registered capital inflow to Turkey in the forms of direct investment, portfolio investment and other investments (loans and bank deposits) remained at $10.8 billion in the first 11 months.  

Foreign direct investment inflow remained at $9.2 billion in the first 11 months. Moreover, $3.7 billion of this was real estate investment. In other words, property sold to foreigners is registered as "foreign investment." When this sum is deducted, then it can be seen that foreign direct investment inflow was $5.5 billion. 

However, the primary loss of blood was in foreign investments in the stock exchange. Let alone an increase in portfolio investments in the period from Jan.-Nov., 2015, there has been a drop of nearly $15 billion. While there was $19 billion in foreign resource inflow in the same period in 2014, there was a withdrawal of nearly $15 billion in 2015. 

In other foreign inflow made up of loans and bank accounts, $16.3 billion arrived. It was the...