Türkiye is making strides toward becoming a more attractive destination for foreign direct investment (FDI), with ambitious goals set for the next few years. Trade Minister Ömer Bolat recently announced plans to boost the country’s share of global FDI from its current 1% to 1.5% by 2028 during his address to the parliament's plan and budget commission.
Reflecting on past achievements, Bolat stated, "Our share in foreign investments globally was 0.2 percent in the past. We increased it to 1 percent by 2002, and our goal is to reach 1.5 percent by 2028." His statements came on the heels of eye-catching statistics reported by the International Investors Association (YASED), indicating Türkiye attracted approximately $7.67 billion in FDI during the first three quarters of 2024. This figure marks an impressive 8% increase when compared to the same period last year.
Over the decades, Türkiye has experienced significant growth in foreign investments. From merely $1 billion through the years 1950 to 1980, the country saw FDI balloon to $15 billion from 1980 to 2002. Since then, the total has surged to around $271 billion between 2003 and 2024, signifying Türkiye's appeal as a growing economic power.
"While the number of foreign investors in Türkiye was only 5,600 until 2002, it has now surged to approximately 83,000 direct investors," Bolat pointed out. This upsurge suggests not only faith from foreign investors but also progressive improvements made to the nation’s business environment.
An intriguing facet of this investment growth lies within the sectors where foreign investments are pouring. According to YASED, equity capital inflows accounted for $4.33 billion of the total FDI recorded from January to September 2024, with the wholesale and retail trade sector capturing $932 million, representing 22% of these equity inflows. Notably, real estate also played a significant role, with foreign buyers investing about $2.2 billion during the same period.
Looking at the geographic sources of these investments, the Netherlands emerged as the leading player, contributing 19% of the total foreign investments, followed closely by Germany at 12% and the United States at 11%. This influx from various nations points to strong international confidence in Türkiye's future economic prospects.
Beyond attracting foreign capital, Minister Bolat shed light on the nation’s improving trade balance. He shared, "There has been a decrease of $27.5 billion in imports and a $35.5 billion reduction in the foreign trade deficit." By the end of September 2024, the current account deficit stood at $5.3 billion, showcasing remarkable improvements from previous years.
Bolat attributed this encouraging development to Türkiye's economic and political stability, transparent legal framework, and resilient overall economic progress. He quipped, "Foreign investors wouldn’t come here just for our looks. They come because of our economic policy, political environment, and growth potential." This reflection underlines the country's strategic efforts to strengthen connections with international investors.
With aspirations of becoming one of the top global destinations for FDI, Türkiye seeks to advance its place on the world stage. The Minister's comprehensive strategy appears well-received, aiming to create not just short-term gains but fostering long-term relationships with foreign investors, which is pivotal for economic sustainability. The path forward for Türkiye seems promising, especially with the growing interest from abroad and the positive economic indicators painting a hopeful picture for the years to come.
Tapping potential from burgeoning sectors, the Turkish government is likewise encouraging investments not only concentrated on traditional sectors but also diversifying toward technology, renewable energy, and other future-oriented industries. Such directives mirror the global shift toward sustainable practices.
Türkiye's vision for the future is undoubtedly ambitious. The promise of achieving 1.5% of the global FDI market share by 2028 sparks interest on the investment map. If they continue on this uphill trend, analysts predict even greater foreign financial inflows would solidify Türkiye's standing as an economic powerhouse. The groundwork being laid today could very well yield significant dividends tomorrow.
Reiterated statistics and growing interest clearly indicate Türkiye’s potential as a leading FDI destination. The combination of governmental commitment alongside proactive measures will be key to shaping Türkiye’s investment environment for both current and future investors.
