Foreign investment continues to grow in Turkey despite continuing inflation (+78.5% year on year in June after 73.5% in May), favored by currency depreciation. In May 2022, the total value of foreign direct investment (FDI) inflows gained momentum from its slow evolution in the first four months by reaching USD 1.18 billion. With this latest figure, FDI inflows to Turkey in the first five months of 2022 increased by 8.7% compared to the same period in 2021, amounting to USD 3.73 billion. Property sales accounted for 62.7% of total FDI inflows in the first five months while the three sectors that received the most capital investment in May were wholesale and retail trade respectively. , accommodation and catering and ICT. 35% of capital inflows came from Switzerland, followed by the Netherlands and Japan.
On the diplomatic front, Turkey has asserted itself as a strategic diplomatic mediator in the negotiations held between Ukraine and Russia regarding the grain agreement. Ukraine and Russia have indeed signed an agreement with Turkey and the United Nations on the export of cereals and agricultural products via the Black Sea in Istanbul on July 22. The negotiated agreement guarantees the safe passage of commercial vessels from Ukraine's three main Black Sea ports (Odessa, Chernomorsk and Yuzhny) in the coming weeks. Ukrainian pilot ships will guide grain ships through a safe corridor in the mined Black Sea to protect Ukrainian shores from possible Russian assaults, then cross the Bosphorus Strait. The ships will be controlled by a joint coordination centre, based in Istanbul and comprising representatives of all parties and the United Nations, in order to respond to concerns from Moscow, which wants to be sure that the cargo ships will not bring weapons to Ukraine. This agreement follows months of negotiations led by Turkey and the United Nations and marks the first major agreement between Ukraine and Russia since the beginning of the war.
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