In anticipation of a change to a more conventional economic strategy following the May 14 elections, four government officials and analysts stated that foreign investors are eager to boost their investments in Turkey, particularly in mergers and acquisitions.
After a cost of living problem caused by inflation that eroded his popularity in recent years, opinion surveys indicate that President Tayyip Erdogan is facing the worst electoral challenge of his 20 years in office in the presidential and parliamentary elections.
The central bank’s unconventional approach of slashing interest rates, supported by Erdogan, caused the lira to fall, which fueled the inflation spike.
The result was a decrease in inflows, but investors anticipate that as the economy becomes more stressed, changes will be made towards a more standard course of action, which would in turn spur investment.
According to the officials, who declined to be identified because they lacked the authority to speak on the subject, investors from Europe, Israel, and the Gulf, which includes Saudi Arabia and the United Arab Emirates, are now showing a strong interest in infrastructure investments, particularly in the energy sector.
One senior government official said that foreign investors had discussions with the government, opposition parties, and both public and private sector businesses.
“Demand has increased significantly over the past several weeks,” he declared. “I feel optimistic for the first time. Moreover, direct investments appear to be flowing from the Gulf.”
Regardless of the election’s conclusion, Musfik Cantekinler, a specialist in corporate finance services, predicted that the M&A industry will grow.
“Israeli and European investors are in touch with me. The tourist industry is also a concern for Russians. European investments are anticipated, particularly in the manufacturing and industrial sectors, “he stated.
Since a failed coup attempt in 2016, M&A agreements in Turkey have decreased, falling from $14.3 billion in 2021 to $5.3 billion in 2022.
A significant turn to conventional economic strategy is anticipated in the event that the opposition wins the presidential election, however it is unclear how much of a shift there would be if Erdogan holds into power.
Mehmet Simsek, a renowned worldwide businessman and former economic czar, is allegedly directing the development of economic policy, according to Erdogan. Erdogan, though, asserted in a late-night interview that the “Turkish model,” which prioritises investment with low loan rates, will remain.
A “extremely serious” round of purchase initiatives, according to a senior government official.
No matter who wins the election, economic management will change, according to the popular consensus, which raises hopes that investment inflows and outflows would be simpler.
He said that although Western investors were more interested in fintech and digital, the UAE and Saudi Arabia were eager to invest in the energy sector.
Investment is being facilitated by anticipation of improvements in economic policy, according to a senior executive of a consultancy firm in Ankara.
In any event, it is anticipated that Turkey would adopt orthodoxer, more predictable economic policies.
