by Burak Akinci
ANKARA, Feb. 26 (Xinhua) -- Grappling with economic woes unseen in decades, Türkiye is seeking to shore up foreign investments in 2024 to boost its economy.
Foreign Direct Investment (FDI) inflows into Türkiye amounted to 10.6 billion U.S. dollars in 2023, Engin Aksoy, chair of the International Investors' Association, told reporters last week in Istanbul, the nation's financial heart.
In 2022, Türkiye's FDI inflows amounted to approximately 13.7 billion dollars. However, early in 2023, the implementation of an unconventional monetary policy aimed at curbing soaring inflation through low interest rates dissuaded foreign investors.
To rekindle foreign investors' confidence, Türkiye pivoted its economic strategy and initiated a tightening cycle under the helm of Finance and Treasury Minister Mehmet Simsek since June 2023.
However, despite the heightened interest in Turkish assets following last year's policy shift, direct foreign fund inflow has remained limited, according to observers, as the emerging nation grapples with a widening current account deficit and a significantly depreciated currency.
For analysts, some foreign companies and investors might mull a return to Turkish assets after the country's municipal elections set for end-March.
"There could be inflows of hedge funds and Turkish equities may prove to be interesting. But for long-term investments, Türkiye needs to improve its regulatory system and enhance structural reforms," Mustafa Sonmez, an Istanbul-based economist, told Xinhua.
The analyst added that if as forecasted by the Ankara government, its inflation drops from the current 65 percent to around 36 percent in the year-end, and overall macroeconomic stability is maintained, more FDI may be forthcoming.
At present, Türkiye's main sources of foreign investment include the European Union, constituting 53 percent of the total, and Middle Eastern countries, contributing 18 percent. To diversify its foreign investment sources, Türkiye is proactively engaging with potential partners from oil-rich Gulf nations to partake in its infrastructure megaprojects.
"Istanbul Canal and city hospitals ... are among these projects," a source close to the government told Xinhua on the condition of anonymity.■
