Foreign Direct Investment inflows strengthen as EU investments rise to 91% share – AzerNews

Foreign Direct Investment Report: Türkiye’s Progress Towards Sustainable Development Goals

FDI Inflows and Contribution to Economic Growth (SDG 8)

In a significant development for SDG 8 (Decent Work and Economic Growth), Türkiye has demonstrated robust economic progress by attracting substantial Foreign Direct Investment (FDI). According to the International Investors Association (YASED) bulletin, FDI inflows for the first eight months of 2025 reached $10.6 billion, a 58% increase compared to the same period in 2024. This influx of capital is crucial for job creation and sustained economic development. The cumulative value of FDI since 2003 now exceeds $284 billion, underscoring long-term investor confidence in the nation’s economy.

• August 2025 Total FDI Inflow: $1.8 billion
• January-August 2025 Total FDI Inflow: $10.6 billion
• Cumulative FDI Since 2003: Over $284 billion

The composition of the $1.8 billion FDI in August reflects diverse investment strategies supporting economic stability:

• Equity Capital Investments: $1.5 billion
• Real Estate Purchases: $202 million
• Debt Instruments: $137 million

Sectoral Investment Analysis: Fostering Innovation and Sustainable Industry (SDG 9 & SDG 2)

Investment distribution across key sectors highlights a strategic alignment with SDG 9 (Industry, Innovation, and Infrastructure) and SDG 2 (Zero Hunger). The information and communication sector received $1 billion in August, representing 69% of equity capital investments and signaling a major push towards a digital and innovative economy.

Leading sectors for investment in the first eight months of 2025 were:

1. Wholesale and retail trade: $2.5 billion
2. Information and communication: $1.2 billion
3. Food manufacturing: $1.2 billion

The substantial investment in food manufacturing directly supports the goals of SDG 2 by strengthening food production systems and enhancing food security.

International Partnerships Driving Investment (SDG 17)

The data underscores the importance of SDG 17 (Partnerships for the Goals), with international collaboration being a cornerstone of Türkiye’s FDI success. European Union (EU-27) countries have historically been major partners, accounting for 58% of total FDI from 2003 to 2024. This partnership intensified in the first eight months of 2025, with the EU-27 share of inflows surging to 91%.

Top Investor Countries in August 2025:

• Luxembourg (71%)
• The Netherlands (14%)
• Switzerland (2%)
• Azerbaijan (2%)
• Ireland (2%)

Top Investor Countries (January-August 2025):

1. The Netherlands – $2.5 billion
2. Kazakhstan – $1.1 billion
3. Luxembourg – $1.1 billion

Global Investment Trends and Challenges for Clean Energy (SDG 7)

On a global scale, early-stage FDI Markets data shows a surge in greenfield investment announcements, exceeding $700 billion in the first half of the year. This trend is largely driven by mega-projects in data centers and semiconductor facilities, aligning with global progress on SDG 9. However, this growth presents a challenge for SDG 7 (Affordable and Clean Energy). Despite the rising electricity demand from these new technologies, global investment in renewable energy experienced a significant decline, falling from $147 billion in the first half of 2024 to $83 billion in the same period of 2025. This downturn highlights a critical need to re-prioritize and scale up investments in clean energy to ensure sustainable industrialization and combat climate change.

SDGs Addressed in the Article

• SDG 7: Affordable and Clean Energy

  The article directly addresses this goal by highlighting a significant decline in global investments in renewable energy, which is a critical component of achieving affordable and clean energy for all.

• SDG 8: Decent Work and Economic Growth

  The core theme of the article is Foreign Direct Investment (FDI), a key driver for economic growth. The data on FDI inflows into Türkiye and global greenfield investments directly relates to stimulating economic activity and development.

• SDG 9: Industry, Innovation, and Infrastructure

  The article details FDI flows into specific sectors such as “information and communication,” “food manufacturing,” “data centers,” and “semiconductor facilities.” These investments are fundamental to building resilient infrastructure, promoting industrialization, and fostering innovation.

• SDG 17: Partnerships for the Goals

  This goal is addressed through the discussion of international financial flows. The article specifies the sources of FDI into Türkiye (e.g., EU countries, Luxembourg, Netherlands, Kazakhstan), illustrating the global partnerships that mobilize financial resources for development.

Specific SDG Targets

1. SDG 7: Affordable and Clean Energy

   • Target 7.a: Enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article highlights a negative trend concerning this target by reporting that “renewable energy investments saw a decline, falling from $147 billion in the first half of 2024 to $83 billion in the same period of 2025.”

2. SDG 8: Decent Work and Economic Growth

   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances. The article’s focus on the significant increase in FDI inflows to Türkiye (“$10.6 billion” in eight months, a “58% increase”) directly supports the objective of sustaining economic growth.

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product. The article shows investment in key industrial and innovative sectors, including “Wholesale and retail trade: $2.5 billion,” “Information and communication: $1.2 billion,” and “Food manufacturing: $1.2 billion,” which contributes to industrialization.

4. SDG 17: Partnerships for the Goals

   • Target 17.3: Mobilize additional financial resources for developing countries from multiple sources. The article provides concrete data on this, stating that Türkiye attracted “$10.6 billion” in FDI from various countries, with the EU accounting for “91%” of this inflow in the first eight months of 2025.

Indicators for Measuring Progress

1. For SDG 7 (Target 7.a)

   • Indicator 7.a.1: International financial flows to developing countries in support of clean energy. The article provides a direct measure for this indicator, noting the global decline in renewable energy investments from “$147 billion” to “$83 billion” in the first half of the year.

2. For SDG 8 (Target 8.1) & SDG 17 (Target 17.3)

   • Indicator 8.1.1 / 17.3.1: Foreign direct investment (FDI) inflows. The article is rich with data points for this indicator, including the “$1.8 billion” FDI inflow to Türkiye in August, the “$10.6 billion” total for the first eight months of the year, and the cumulative value of over “$284 billion” since 2003.

3. For SDG 9 (Target 9.2)

   • Indicator 9.2.1: Manufacturing value added as a proportion of GDP and per capita. While not providing a proportion, the article gives the absolute investment values that contribute to this indicator, such as “$1.2 billion” invested in “Food manufacturing” and global investments in “semiconductor facilities.”

Summary Table of SDGs, Targets, and Indicators

Source: azernews.az