Foreign investors set sights on Turkey after elections

Four government officials and analysts said they expect a more conservative economic policy following the May 14 elections, prompting international investors to increase mergers and acquisitions in Turkey.

After an inflation-driven cost of living problem undermined his support, President Tayyip Erdogan faces his biggest electoral challenge in the presidential and parliamentary elections.

As the central bank reduced interest rates, the lira fell, fueling inflation. While that decreased inflows, investors expect economic difficulties to lead to a more normal approach, promoting investment.

The officials, who declined to be named because they were not authorized to speak on the matter, said investors from Europe, Israel, and the Gulf, including the United Arab Emirates and Saudi Arabia, are now interested in infrastructure investments, particularly energy.

One senior government official claimed foreign investors have met with government, opposition, and private sector parties.

“There has been a significant increase in demand in the last few weeks,” he stated. “I’m hopeful. Gulf investments are also direct.”

Regardless of the election, corporate finance services specialist Musfik Cantekinler predicted M&A market growth.

European and Israeli investors contact me. Russians also examine tourism. “I expect European investments in manufacturing and industry,” he said.

M&A agreements in Turkey decreased to $5.3 billion in 2022 from $14.3 billion a year earlier and have been weaker since the 2016 coup attempt.