Türkiye emerged as the fourth country in Europe in terms of the number of foreign direct investment (FDI) projects in 2023, which increased 17% year-over-year, according to a report on Thursday.
The total number of FDI projects across Europe dropped 4% annually in 2023 to 5,694, according to data released by the London-based accounting services firm EY.
The report highlighted that investment activity in Europe was 11% lower than the pre-pandemic levels of 2019 and 14% lower compared to 2017, which marked a record year in terms of FDIs.
France led Europe in the FDI ranking for the fifth consecutive year, despite a 5% decrease in the number of foreign investment projects, which fell to 1,194, the report said.
The U.K. ranked second with a 6% increase in the number of FDI projects, which soared to 985.
The report noted that foreign investors significantly reduced their activities in Germany last year as the number of projects was down 12% annually, calculated at 733, the lowest level since 2013.
The report said international investment in Europe decelerated due to disappointing economic growth, high inflation, rising global geopolitical tension and persistently high energy prices, especially compared with the United States.
It also cited the impacts of radical changes in working practices combined with the decreasing number of regional headquarters in Europe, which it said fell by more than half (51%) in 2023.
On the other hand, the number of FDI projects by Türkiye rose 17% year-over-year in 2023, surpassing Spain and ranking fourth in Europe, right after Germany.
The report said the number of projects in Türkiye stood at 375, compared to 321 in 2022 when the country ranked fifth.
“Europe needs foreign investment as much as foreign investors need Europe,” says Julie Linn Teigland, EY EMEIA Area Managing Partner. "Policymakers and businesses should, therefore, work together to create the conditions for investment to flourish.”
Most foreign investment in Europe is internal – a business located in one European country establishes or expands a project in another. Outside Europe, the top countries of origin for investment are the U.S. (accounting for 19% of projects), China (5%) and Japan (3%), according to EY.
