Foreign direct investment (FDI) in Turkey fell 35 percent to $6.85 billion in the first eight months of 2026, down from $10.57 billion in the same period last year, the Ekonomi news website reported, citing the International Investors Association (YASED) on Wednesday.
YASED based its report on balance of payments data from Turkey’s central bank.
The decline comes as Turkey struggles with persistent inflation and high borrowing costs. FDI can provide long-term financing, create jobs and bring new technology, helping businesses expand as the government works to stabilize the economy.
Turkey has received $295 billion in FDI since 2003, according to YASED.
Net inflows in August totaled $719 million, including $596 million in equity investment and $244 million in property purchases by foreign investors. Investment liquidations reduced the total by $20 million, while transactions involving debt instruments reduced it by another $101 million.
For the January-August period, equity investment totaled $5.6 billion and net property investment reached $1.844 billion.
Information and communication businesses received $269 million in foreign equity investment in August, accounting for 45 percent of the monthly total.
Manufacturers of chemicals, chemical products and basic pharmaceutical products and materials received 24 percent. Manufacturers of computer, electrical, electronic and optical products accounted for another 5 percent.
Over the first eight months wholesale and retail trade attracted the most foreign equity investment, at $1.092 billion. Information and communications followed with $799 million, ahead of chemicals at $472 million, finance at $469 million and metals at $465 million.
Kazakhstan was the largest source of foreign equity investment in August, accounting for 33 percent of inflows. The United States followed with 22 percent, the Netherlands with 19 percent, Germany with 13 percent and Spain with 4 percent.
European Union countries together accounted for 39 percent of foreign equity investment during the month. The bloc has historically been Turkey’s largest source, providing 59 percent of foreign equity inflows between 2003 and 2025.
Turkey also needs foreign financing to cover its recurring current account deficits — the gap between what it earns from abroad and what it spends overseas.
Turkey’s current account deficit grew to $31.5 billion in January-August from $19.67 billion a year earlier, according to central bank data. Although the country posted a $4.05 billion surplus in August, helped by tourism and other services, its deficit over the preceding 12 months totaled $42.1 billion.
Attracting more direct investment is important to closing that gap and supporting growth, the US State Department said in its 2026 investment climate report.
The figures cover the period before September’s investment fund crisis, when Turkey’s securities regulator ordered the liquidation of 131 funds following suspected share-price manipulation and failures to meet withdrawal requests.
That crisis concerned a separate part of the investment market and occurred after the period covered by the FDI report.
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