The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

Türkiye experienced strong economic growth between 2002 and 2007, and it weathered the global economic crisis of 2008-2009 better than most countries, establishing itself as a relatively stable emerging market with a promising trajectory of reforms and a strong banking system. However, over the last several years, economic and democratic reforms have stalled and, by some measures, regressed. In 2021, Türkiye’s GDP grew 11 percent year-over-year (YOY), the highest growth rate in ten years, but the Turkish lira also shed 44 percent of its value against the dollar and has lost over 80 percent of its value against the dollar in the last five years. In 2022, GDP grew by 5.6 percent, exceeding expectations, while inflation averaged 64.3 percent. In 2023, growth is expected to be around three percent, with significant downside risks. Continued unorthodox monetary policy, currency depreciation, inflation, high current account deficits, and over $100 billion in damage from the February 2023 earthquakes have left Türkiye vulnerable to external economic shocks.

Türkiye’s foreign direct investment (FDI) regime treats foreign investors identically to domestic investors and places few restrictions on acquisitions by foreign firms. However, opaque rulemaking and legislative processes added risks for all investors in 2022. Türkiye’s FDI equity capital inflows amounted to $6.48 billion 2022, compared to $7.1 billion in 2021. Türkiye’s investment incentives promote green and renewable investments and the development of strategic industries and developing regions of Türkiye. Geopolitical shocks, including Russia’s full-scale invasion of Ukraine, have spurred inflation primarily through increased energy prices in Türkiye but have not meaningfully degraded the country’s investment climate. Export controls and sanctions compliance risks related to assets with business interests in Iran, Belarus, and Russia continue to be a concern for investors. Türkiye’s investment climate is positively influenced by its large domestic market, favorable demographics, skilled workforce, and strategic location.

To access the full text of the 2023 ICS, visit the U.S. Department of State Investment Climate Statements website.