Foreign investors are looking to increase their deals in Türkiye after the elections


Foreign investors are looking to increase their investment in Türkiye, particularly mergers and acquisitions, with a shift to a more traditional economic policy expected after the May 14 elections, four government officials and analysts said.

Opinion polls show that Turkish President Recep Tayyip Erdogan faces an electoral challenge, the biggest in the two decades he assumed power in the presidential and parliamentary elections, after his popularity declined in the past few years due to the cost of living crisis caused by inflation.

Inflation has been exacerbated by the lira’s decline at a time when the central bank has cut interest rates, an unorthodox policy championed by Erdogan.

While this has led to a decline in flows to Türkiye, investors expect that the growing economic pressures will lead to a move towards a more standardized policy, which in turn encourages investment.

The officials, who declined to be named, said that investors from Europe, Israel and Gulf countries, including the UAE and Saudi Arabia, are now showing strong interest in investing in the Turkish infrastructure sector, especially the energy sector.

A senior government official said foreign investors had held talks with the government, opposition parties and companies in the public and private sectors.

The volume of mergers and acquisitions deals in Türkiye fell to $5.3 billion in 2022 from $14.3 billion in the previous year, and had generally declined since a failed coup attempt in 2016.

The opposition victory in the presidential elections is expected to lead to a decisive shift to traditional economic policy, but it isn’t yet clear how much that will change if Erdogan remains in power.

Erdogan said that former economic Czar Mehmet Simsek, who is highly respected among foreign investors, coordinates work on economic policies.

However, Erdogan said in an interview last night that the Turkish model that prioritizes investment at low interest rates will continue.

Another senior government official said very serious acquisition initiatives were under way.

The prevailing view is that economic management will change regardless of who wins in the elections, which reinforces expectations that investment inflows and outflows will be easier.

He said that while the UAE and Saudi Arabia are looking for investments in the energy sector, Western investors are more interested in financial technology and the digital sector.

An executive at a consulting firm in Ankara said expectations of changes in economic policy paved the way for investment.

“In any case, Türkiye is expected to shift to more predictable and conventional economic policies,” he said.

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