The amount of fixed investments with incentive certificates, which increased in nominal terms even in 2020 and 2021 when the pandemic was effective, contracted by more than 11 percent last year.
Despite the implementation of an economic model based on investment, production and exports in Turkey since the election period, the desired level of fixed investments with incentive certificates has not been reached.
Last year, despite the 64.77 percent inflation investments with incentive certificates decreased by 11.3 percent compared to the previous year to TRY 1.25 trillion. In 2022 this amount stood at TRY 1.41 trillion. Employment created within the scope of incentivized investments also dropped to 345 thousand. The highest sectoral decrease was 92.7 percent in the mining sector, which was at the top of agenda with the landslide in İliç.
Mining investments decreased by 92.7 percent to TRY 22.49 billion. On the other hand, energy investments increased by 91.7 percent to TRY 261.6 billion. The amount of investment required to employ one person decreased from TRY 3.92 million to 3.63 million.
In 2019, 5,402 certificates were issued and TRY 594.8 billion of investment commitments were made within the scope of these documents. The number of investments with incentive certificates doubled the following year and has continued to increase since then. In 2020, 10,134 documents were issued foreseeing an investment of TRY 881.54 billion. In 2021, the number of documents increased to 12,474 and the fixed investment amount to TRY 917 billion. In 2022, while the number of documents increased slightly from 12,474 to 13,527, the amount of incentivized investment increased by 54.1 percent to TRY 1.41 trillion.
Investments did not contribute to employment
Employment created within the scope of investments with incentive certificates also declined in 2023. While 197,802 employment commitments were made in 2019, this number increased to 300,324 in 2020 and 370 thousand 841 in 2021. But in 2022, the number of committed employment in incentivized investments decreased to 360,751 and decreased further to 345,191 in 2023.
Share of new investments declined
While the share of new investments decreased, the share of extension (completion, renewal) investments increased last year. While the share of new investments decreased from 70.2 percent to 67.3 percent, the share of extension investments increased from 21.9 percent to 26 percent.
Mining investments got the axe
In 2023, when total investment decreased by 11.3 percent, it was noteworthy that mining sector investments got the axe. Mining investments, which started to be discussed in the public with the landslide in İliç district of Erzincan, decreased by 92.7 percent compared to the previous year from TRY 308.5 billion to TRY 22.49 billion. In the same period, manufacturing industry investments decreased by 7 percent from TRY 747 billion to TRY 694 billion and agricultural investments decreased by 0.6 percent to TRY 17.84 billion. Investment in the services sector increased by 26.1 percent from TRY 204 billion to TRY 257 billion. Energy investments, on the other hand, increased by a high rate of 91.7 percent from TRY 136 billion to TRY 261 billion.
Share of foreign investments increased
Although the amount of investments made by foreign capital firms among the investments with incentive certificates is small in quantity, their share in total investments increased last year. While 9 percent of total investments were made by foreign capital firms in 2022, this ratio increased to 11.6 percent in 2023.