By Andrew Jay Rosenbaum
ISTANBUL
International investors show considerable interest in Turkey, Keith Durward, head of advisory at the global auditing firm KPMG Turkey, told The Anadolu Agency.
"Turkey continues to be an important investor target. There are, however, some specifics that international investors are looking at closely." Durward said in an interview with AA at the Financial Times Summit on the Turkish economy in Istanbul on Wednesday.
"In a relatively low growth period, there are obviously concerns about investor returns. The government should establish a dialogue with business, to build confidence in its direction of the economy."
He said there were also concerns of potential stress on the banking system.
Durward added: "Turkish banks are healthy and have a high level of reserve capital, but the fall of the Turkish lira against the dollar is pressuring corporates which have a high level of dollar debt.
"If corporates struggle to service that debt, they may have difficulty fulfilling obligations to banks."
He said there was also frustration about certain types of regulation.
"Caps on credit spending by consumers are also a concern to investors, as is control of inflation."
Currently at 7.6 percent, the inflation rate in Turkey is sharply reduced from the beginning of the year.
Business also needs to have greater confidence in the legal system, Durward said.
He said: "Like Italy and France, Turkey still has an over-regulated labor market which structural reforms should address.
"What could change all of this would be improved dialogue with business, and that would influence international investors as well."
