Istanbul: The World Bank plans to allocate an extra $1 billion to Trkiye's earthquake-affected region in 2025, increasing the total support to the southeast region to $4 billion.
According to Anadolu Agency, Humberto Lopez, the World Bank Country Director for Trkiye, stated at a recent meeting in Istanbul that the World Bank and the International Finance Corporation (IFC) are collaborating on various projects in Trkiye. These projects include infrastructure, health, water distribution systems, and hospitals in the earthquake-stricken southeast of the country.
Lopez highlighted that stability and predictability in Trkiye's economy, bolstered by structural reforms, are encouraging for investors. Companies view Trkiye as a long-term investment location, with logistics and energy being crucial factors for businesses planning for a 10-15 year horizon.
He further remarked on Trkiye's strategic potential to connect multiple countries through infrastructure initiatives, such as the Middle Corridor, the Development Road, and the railway project across the Yavuz Sultan Selim Bridge over the Bosphorus Strait.
Lopez also mentioned the bank's $660 million investment in Trkiye's electrified railways, aimed not only at reducing carbon emissions but also at cutting transport costs between the east and west.
Wiebke Schloemer, IFC director for Trkiye and Central Asia, emphasized the private sector's resilience and production capacity in the earthquake-affected area, attributing it to Trkiye's strategic location and young workforce. She noted that foreign investors are keenly observing macroeconomic trends, economic stability, and rating upgrades by credit agencies.
Schloemer pointed out that geopolitical and political risks are global and not confined to Trkiye. She underlined that stabilization efforts in Trkiye's economy have shown positive results over the past 18 to 19 months, as indicated by the slowing of credit rating downgrades and a fall in the country's 5-year credit default swap from 600 to about 270.
She mentioned that Trkiye is recognized as a leading developing nation with significant economic potential, drawing the attention of many investors. Schloemer noted that although policy changes can occur rapidly, affecting investor confidence, continuity is essential for maintaining predictability. The IFC anticipates a substantial decrease in inflation, though it cannot specify an exact figure.