Erdogan heads to Gulf seeking investment for Turkey's strained economy
Erdogan is visiting Saudi Arabia, followed by Qatar and the UAE between July 17-19, in part to drum up foreign funding that would boost Turkey's strained economy after his re-election in May
Representative Image
Turkish President Tayyip Erdogan said he has "high hopes" for investment and finance as he left on Monday for a trip to Saudi Arabia, Qatar and the United Arab Emirates as Turkey looks to ease budget strains, chronic inflation and a weakening currency. Two senior Turkish officials have said previously that Turkey expects Gulf countries to make direct investments of about $10 billion initially in domestic assets as a result of Erdogan's trip to the region.
Since 2021, when Ankara launched a diplomatic effort to repair ties with Saudi Arabia and the UAE, investments and funding from the Gulf have helped relieve pressure on Turkey's economy and hard currency buffer. "This visit has two main topics: investments, and a financial dimension. We have high hopes for both," Erdogan told a news conference at an Istanbul airport before setting off.
Erdogan is visiting Saudi Arabia, followed by Qatar and the UAE between July 17-19, in part to drum up foreign funding that would boost Turkey's strained economy after his re-election in May. "Turkey will have a serious investment opportunity in the defence industry, infrastructure and superstructure investments in the three countries," he said.
"In addition, these countries will have the opportunity to purchase certain assets from Turkey," he added. The two officials said overall investments of up to $30 billion were expected over a longer period in Turkey's energy, infrastructure and defence sectors.
Last month, Turkish Vice President Cevdet Yilmaz and Finance Minister Mehmet Simsek travelled to the UAE to discuss "economic cooperation opportunities" with counterparts, and they met President Sheikh Mohammed bin Zayed al-Nahyan, Ankara said. Erdogan appointed Yilmaz and Simsek after the elections in part to execute a U-turn after years of unorthodox economic policy that sent inflation soaring and net foreign reserves to a record low in May. As part of the pivot, the central bank hiked rates by 650 basis points last month.
Turkey's budget deficit surged to 219.6 billion lira ($8.37 billion) in June, seven times the deficit a year earlier, data showed on Monday. Annual inflation was close to 40% in June while the lira has weakened nearly 29% this year.
