Türkiye is currently witnessing a noteworthy enhancement in its investment environment, as evidenced by substantial foreign direct investments (FDI) flowing into various industries. A report by the Investment Office reveals that the fintech sector is especially prominent, drawing the attention of international investors and showcasing the potential for the emergence of future unicorns.
The surge in foreign investments aligns with improvements in credit ratings and the development of new infrastructure projects across the region. These developments are poised to strengthen Türkiye’s economic resilience and foster its long-term growth trajectory.
The fintech landscape in Türkiye has garnered significant attention due to its rapid advancement. Financial technology (fintech), which automates and improves the delivery of financial services, has evolved significantly since its origins as a back-end technology used primarily by established financial institutions. Today, it encompasses a broad spectrum of consumer-oriented services. The growth of Türkiye’s fintech ecosystem was highlighted at the annual Türkiye Entrepreneurship Ecosystem event, emphasizing the country’s capacity to nurture billion-dollar fintech companies alongside sectors such as deep tech and life sciences.
A notable example of success in this arena is Dgpays, a Turkish fintech company that experienced a significant increase in valuation after receiving major funding from the European Bank for Reconstruction and Development and Truffle Capital. This represents one of the largest international investments in the country’s fintech sector, solidifying its reputation as a key player in global fintech innovation.
In a recent assessment, Moody’s upgraded Türkiye’s credit outlook to “positive” from “stable,” attributing this change to the country’s commitment to orthodox monetary policies. Despite facing short-term inflationary pressures, improvements have been noted in monetary policy effectiveness and overall economic stability. Moody’s also highlighted tightening measures designed to address external financial imbalances and bolster foreign currency reserves. The European Bank for Reconstruction and Development made a record investment of €2.5 billion in Türkiye in 2023, significantly boosting its financial involvement compared to prior years.
This influx of funds was notably driven by Türkiye’s recovery initiatives following natural disasters, with over €800 million already allocated to assist affected businesses and individuals. Furthermore, investments are being funneled into supporting small and medium-sized enterprises (SMEs) while also promoting a green transition across the nation.
In 2023, Türkiye attracted an impressive $11 billion in FDI, despite a global trend of decreasing investments. Key economic players contributing to this influx include the Netherlands, Germany, the United Arab Emirates, and the United States. The resilience displayed by Türkiye in this context is particularly commendable, as many emerging markets experienced a decline in foreign investments. The ability to exceed $10 billion in FDI serves as a testament to the country’s strong economic fundamentals.
Looking ahead, projections indicate the potential for further growth in investment throughout 2024, largely fueled by robust partnerships between Türkiye, Europe, and Gulf regions. Additionally, Türkiye continues to make meaningful advancements in its technological and entrepreneurial framework, positioning itself as a competitive frontier for innovation and investment. The confluence of these factors is likely to underpin a more dynamic and prosperous economic landscape in the coming years.