Tourism is CAD lifeline, but investment is poor


Investments rose by 7.4% while public investments increased by 2.56% and private sector investments surged by 7.95% in 2021, according to the data from the Strategy and Budget Presidency. Despite the overall growth, public investments declined in the transportation, housing, energy, manufacturing, health, and tourism industries. The mining sector topped with the highest investments at 19.59% followed by the agriculture sector at 18.34%, the manufacturing industry at 17.95%, and the health sector at 17.10%. Tourism was the only sector among Turkey’s 10 main industries with declining investments. Investments decreased by 4.92% in the tourism sector in 2021. Tourism also saw a 59.74% investment decrease in 2020. The 2-year contraction totaled 61.73%. Tourism investments by the private sector fell by 60% in 2020 and by 5% in 2021 – the 2-year drop totaled 62%. The public sector’s tourism investments decreased by 63.16% in 2019, 42.62% in 2020, and 1.40% in 2021. Thus, the 3-year decline totals 79.16%. Turkey is on the edge of a balance of payments crisis. From this perspective, the ongoing investment decline by the private and public sectors in tourism, which is considered a lifeline for the current account deficit (CAD), should be questioned.

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