International firms planning $7.1 bln investment in Türkiye: YASED

ISTANBUL

Members of the International Investors Association (YASED) are planning $7.1 billion worth of direct investments in Türkiye in the next six months, its chairman Engin Aksoy has said.

The May elections did not stop international direct investments however they could have been at better levels considering Türkiye’s potential, Aksoy told a press conference in Istanbul.

“We think that but the reason behind it is a lack of predictability. If there had been predictability, there could have been much higher investments,” he said, adding that there are companies with appetite for investments in Türkiye, but they are waiting to make a move.

Aksoy cited unpredictability as the biggest risk to international direct investments.

“We want an environment of predictability and stability to be created and that investments are protected by laws. Macroeconomic stability and regulatory predictability will give a boost to investment appetite for Türkiye,” Aksoy said.

With its potential to become a regional hub for production, services and trade, Türkiye should be one of the top 10 countries in the world attracting most foreign direct investments, he said, noting that Türkiye aims to have a 1.5 percent share in global foreign direct investments (FDI).

“This is a realistic target and shows the country’s potential. However, its share in global FDIs is between 0.7 percent and 1 percent.”

Last year, Türkiye attracted around $13.3 billion worth of investments and around 50 percent of those were real estate investments, according to Aksoy.

Türkiye lured $331 million worth of FDI through equity capital flow, $356 million through the sale of real estate to foreign nationals, and another $87 million through debt instruments, according to a report by YASED.

As divestment and debt instruments reduced overall FDI inflows by $16 million and $52 million, respectively, Türkiye netted a total FDI inflow of $609 million in May 2023.

The FDI inflows for the first five months of 2023 amounted to $4.4 billion, marking a 16 percent decrease compared to the same period last year.

According to the report, Türkiye has attracted over $257 billion in FDI inflows since 2002.

“The services sector was particularly prominent in the overall equity capital inflows for May 2023, with a specific emphasis on wholesale and retail trade [23 percent] and real estate activities [11 percent]. This was followed by the manufacture of machinery and equipment [10 percent],” said the report.

In May, the EU-27 countries remained the primary source of FDI equity inflows to Türkiye, constituting 64 percent of the total, it added.

The Netherlands accounted for 25 percent of the total, followed by Germany at 14 percent, Ireland at 11 percent, and the U.S. at 11 percent, according to the report.