Türkiye has potential to lure more foreign investments: YASED

ISTANBUL

Türkiye has the potential to attract more foreign investments if necessary steps are taken, says Engin Aksoy, the chair of the International Investors’ Association (YASED).

FDI inflows into Türkiye amounted to $10.6 billion last year, Aksoy said in a press meeting, adding that the country may lure $18.6 billion in foreign investments if the business environment improves in the next six months.

At the news meeting, Aksoy unveiled the results of a survey, “YASED Pulse,” conducted among the CEOs of YASED member companies.

The most important issues on international investors’ agenda this year are the amendments in the law, which regulates the transfer of personal data abroad, and the implementation of the Climate Law and therefore the Emissions Trading System, Aksoy added.

Resolving those issues will be encouraging for investment in 2024, he said.

“As YASED, we believe Türkiye, with its potential, should be among the top 10 countries attracting the most FDI in the world.”

The results of YASED’s Competitiveness Index showed that Türkiye is still attractive for investors in terms of costs, Aksoy said, adding that the country is a huge market with a population of 85 million people and a young labor force.

“It also has a well-developed ecosystem and supply system. However, in the areas of risk indicators and regulatory framework, our performance is not very good.”

In the Pulse survey, CEOs, who represent 85 percent of foreign equity capital in Türkiye, were asked how much investment their headquarters would make in Türkiye if the business and investment environment improved, Aksoy furthered. “We saw that if there are improvements in the business and investment environment, there is an additional investment potential of $18.6 billion in the next six months alone.”

Some 85 percent of YASED members want to see improvement in macroeconomic performance-based risk indicators, while 75 percent indicated that they would make investments if there is improvement in the regulatory framework, Aksoy said.

FDI inflows into Türkiye slipped from $13.7 billion in 2022 to $10.6 billion last year.

Equity capital inflows dropped 20 percent in 2023 compared to the previous year to $5.6 billion. This comprised $3.6 billion worth of real estate sales to foreign nationals and $1.9 billion of debt instruments.

Türkiye’s cumulative FDI inflows since 2002 have surpassed $263 billion.

In 2023, the EU remained the main source of FDI equity inflows to Türkiye with a 53 percent share.

The inflows from Middle Eastern countries rose significantly from 8 percent to 18 percent, with the United Arab Emirates and Qatar playing significant roles in this increase, according to a YASED report on FDI inflows.