Long one of many greatest overseas buyers in Türkiye, the European Bank for Reconstruction and Development (EBRD) on Wednesday mentioned its complete investments within the nation have exceeded 20 billion euros ($21.70 billion).
“This reflects the strength of our partnership with local stakeholders and our long-term commitment and confidence in the potential of the Turkish economy, even during challenging times,” Arvid Tuerkner, the EBRD’s managing director for Türkiye, mentioned.
The remarks got here as Tuerkner mirrored on seven years within the nation as he prepares to transition to his new function because the EBRD director for Ukraine as of subsequent month.
The European lender has invested greater than 20.23 billion euros in Türkiye since 2009 throughout 450 initiatives and commerce finance amenities, with 93% of funds channeled to the non-public sector.
The EBRD invested a document 2.5 billion euros final yr, spearheaded by inexperienced investments and the necessity to answer the devastating earthquakes that struck Türkiye’s southeastern area in February 2023.
So far, in 2024, the financial institution has invested nearly 1 billion euros, in accordance with its web site.
Dynamic non-public sector
Tuerkner highlighted the vitality of Türkiye’s non-public sector, noting its sturdy urge for food for progress, innovation and improvement. He acknowledged that this dynamism is clear within the entrepreneurial spirit and steady drive for progress throughout varied industries.
However, he additionally mentioned the financial setting included necessary challenges and emphasised the significance of predictability within the funding setting and regulatory frameworks.
“One of the key lessons from my time in Türkiye is the extraordinary capacity of the Turkish private sector to adapt to challenges. The agility and resilience displayed by local businesses are commendable. Yet, these qualities alone may not suffice in the case of continuous and severe economic fluctuations. This is where the role of international investors like us becomes crucial,” Tuerkner remarked.
He mentioned the financial institution’s presence and monetary assist are “vital” in selling stability and progress within the Turkish financial system.
“By providing much-needed capital and expertise, we help bridge gaps and create a more conducive environment for sustainable growth. Therefore, consistently supporting structural reforms that enhance the autonomy of local institutions, the effectiveness of regulatory frameworks and the investment climate is essential.”
Policy shift
During his tenure, Tuerkner witnessed the Turkish non-public sector’s response to varied crises, from financial challenges to pure disasters. He famous that international and native challenges have heightened financial vulnerabilities, making structural reforms much more essential.
“However, over the previous yr, now we have seen many optimistic steps towards a return to orthodox financial insurance policies and indicators of sturdy enchancment in investor confidence concerning Türkiye’s potential. This sentiment has additionally been acknowledged by ranking companies,” he famous.
Authorities reversed years of free coverage after final yr’s presidential and parliamentary elections and delivered aggressive financial tightening, primarily to curb stubbornly elevated inflation.
The annual inflation charge started what is anticipated to be a sustained fall in June, dipping to 71.6%.
Since June final yr, the nation’s central financial institution has raised its benchmark coverage charge by a complete of 4,150 foundation factors within the tightening drive that has considerably improved investor sentiment and led to sturdy demand for Turkish property.
The financial institution final raised rates of interest in March, by 500 foundation factors, and has since held regular whereas vowing to tighten coverage extra if it predicts the inflation outlook will worsen, a hawkish pledge it repeated on Tuesday.
“Maintaining a return to orthodox policies is crucial for us and for economic stability. As of now, we see no indication of deviation from this path,” Tuerkner mentioned.
Positive indicators amid inflationary pressures
Despite ongoing pressures, Tuerkner expressed optimism about indicators indicating the beginning of a disinflationary pattern.
“High inflation complicates pricing methods even for essentially the most agile non-public sector corporations, fueling uncertainty and warning. In such unsure occasions, resilience turns into much more essential for economies. We are working with our companions and purchasers in Türkiye to spend money on initiatives that may improve the resilience of the Turkish financial system,” he defined.
“A sturdy solution to obtain that is by constructing an inclusive and inexperienced financial system that may take in each international and native shocks.”
During his time period, Tuerkner says he famous a major improve in curiosity in inexperienced investments and a willingness amongst firms to speed up their transformations.
That led the EBRD to offer financing for initiatives throughout varied sectors, together with vitality, infrastructure, and agriculture. “None of this would have been possible without the strong interest shown by companies,” Tuerkner added.
‘Unique’ challenges in Ukraine
Reflecting on 2023, Tuerkner highlighted what he mentioned was an “unprecedented” response of personal sector firms after the devastating February tremors.
“The support provided to the people and cities affected by the earthquakes was one of the strongest demonstrations of solidarity I have ever witnessed. I am proud of the EBRD’s contributions in this regard,” he mentioned.
As he prepares for his new function in Ukraine, Tuerkner additionally spoke about what he sees as “unique” challenges posed by the conflict there and its influence on the nation’s financial stability.
He emphasised the essential function and affect of the non-public sector in sustaining financial stability throughout troublesome occasions, drawing parallels together with his experiences in Türkiye.
“For a aggressive, resilient and inclusive financial system, the non-public sector have to be supported, particularly in growing capacities in digital developments, environmental measures and company effectivity. However, these capacities have to be backed by a positive regulatory setting, making coverage dialogues extraordinarily necessary,” mentioned Tuerkner.
“When these efforts come collectively, they reaffirm the potential of influence establishments just like the EBRD to meet their missions. I’m assured that, simply as my crew in Türkiye has achieved these necessary strategic targets, my colleagues in Ukraine will do the identical.”
Source: www.dailysabah.com