Watch the Regional Economic Outlook launch live
The EBRD has lowered its growth forecast for Turkey to 2.7% in 2024. Tighter monetary and fiscal policies are expected to impact economic growth. The bank sees growth rising to 3% in 2025.
The European Bank for Reconstruction and Development (EBRD) now sees Turkey’s economy growing by 2.7 percent in 2024, down from its previous forecast of 3 percent, as it expects monetary and fiscal policies to remain tight amid persistently high inflation.
The bank expects Turkey’s economic growth to rise to 3 percent in 2025.
The forecast, published today in the EBRD’s Regional Economic Outlook report, sees growth in the EBRD region rising to 3% in 2024 from 2.5% in 2023.
The report noted that Turkey’s economic policy has been tightened by increasing taxes and strengthening macroprudential policy measures. Since June 2023, the Central Bank of the Republic of Turkey has raised its policy interest rate nine times, from 8.5% to 50%.
The country’s growth last year was driven by the services sector and also helped by post-earthquake reconstruction efforts.
A return to more orthodox policies since June 2023 has boosted investor confidence at home and abroad, and Turkey recently received its first sovereign rating upgrade in more than a decade from a major ratings agency.
However, downside risks remain in the form of high inflation, slowing growth in Europe, rising geopolitical tensions in the region, and tightening global financing conditions due to high short-term external financing needs.
The EBRD is one of Turkey’s leading institutional investors, having invested €19.8 billion in 442 projects since 2009, 93 percent of which went to the private sector through its trade finance initiatives.
Read the full report
Download presentation
