FDI inflows surged more than 90 percent in January-February

ISTANBUL

Foreign direct investment (FDI) inflows into Türkiye surged by 92 percent in the first two months of 2025 from a year ago to $2 billion, according to a report by the International Investors’ Association (YASED).

Since 2002, Türkiye has attracted a total of $276 billion in FDI.

Real estate sales accounted for 13 percent of the total FDI inflows in the January-February period.

In February alone, the country recorded $417 million in FDI inflows via equity capital, $134 million through real estate sales to foreign nationals and $28 million through debt instruments.

However, divestment lowered the overall FDI inflows by $18 million, according to the report.

Consequently, the total inbound FDI to Türkiye was $561 million in February.

The amount of FDI received in February 2025, however, declined by 61 percent compared to the previous month, but FDI inflows rose by 205 percent compared to the same month of the previous year.

The wholesale and retail trade sector got ahead of the others and secured a significant share, amounting to 26 percent, with an inflow totaling $110 million, the report said. In the first two months of 2025, FDI inflows into this sector amounted to $780 million.

Following that, ICT, financial and insurance activities, rubber and plastic products and professional, scientific and technical activities surpassed other sectors and entered the top five, capturing a combined total of 45 percent of the total equity capital inflows.

From January to February, FDI inflows into the financial and insurance activities amounted to $132 million or 10 percent of the total inward equity investment.

In February, the Netherlands emerged as the leading source, accounting for 24 percent of FDI inflows, followed by the United States with 20 percent and Switzerland with 12 percent.

The shares of the United Kingdom and Azerbaijan were 8 percent and 7 percent, respectively.

In February, Türkiye posted a current account deficit of $4.4 billion, the Central Bank data showed on April 14.

The 12-month rolling current account deficit was $12.8 billion in February, widening from $11.76 billion in the previous month.

In the first two months of 2025, the current account deficit came in at $8.4 billion.

“We expect the current account deficit to be lower than our target in the medium-term program this year, due to the decreasing energy prices,” Finance Minister Mehmet Şimşek said, commenting on the latest data.

In the program, the government projects that the current account deficit will be $28.6 billion, or 2 percent of the estimated GDP, this year.