Turkey Ranks Among Top European Destinations for Foreign Direct Investment Projects

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Turkey secured the fourth position in Europe for the number of foreign direct investment (FDI) projects in 2023, as per a report by the London-based accounting services firm EY.

The country witnessed a surge in FDI projects, reaching 375 in 2023, marking a notable 17 percent increase from the previous year and generating over 21,000 job opportunities.

While the number of manufacturing projects declined across the continent, Turkey bucked the trend with a 12 percent rise in such projects, according to the 23rd edition of the EY Europe Attractiveness Survey.

Despite a 5 percent annual dip in the number of projects to 1,194, France retained its top position in attracting investment, followed by the U.K., where the number of projects increased by 6 percent to 985. Germany secured the third spot, despite a 12 percent decline in investment to 733 projects.

The post-COVID-19 pandemic recovery of FDI in Europe witnessed a setback, with 5,694 FDI projects announced in 2023, marking a 4 percent decrease from the previous year. Compared to 2019 levels, FDI remained 11 percent lower, and it stood 14 percent below the record high of 2017.

Factors such as sluggish economic growth, surging inflation, escalating global geopolitical tensions, and persistently high energy prices contributed to the deceleration of international investment, particularly when compared to the U.S., the report noted.

Looking ahead, most new projects in the coming year are expected to focus on expanding existing assets rather than venturing into new greenfield developments. This trend is anticipated across high-potential industries such as electric vehicles, life sciences, digital technology, and renewable energy.

However, the report also highlighted looming risks, including an increased regulatory burden, energy price volatility and supply chain disruptions, and political instability, especially in multi-election years.