- EBRD’s 2025 growth forecast for Türkiye unchanged at 3 per cent, with growth of 3.5 per cent predicted in 2026
- High inflation and geopolitical uncertainties continue to pose downside risks
- Bank cautions against premature loosening of policies
The European Bank for Reconstruction and Development (EBRD) expects Türkiye’s economy to grow by 3 per cent in 2025, unchanged from its September 2024 forecast.
The Bank expects the Turkish economy to then grow by 3.5 per cent in 2026.
These forecasts were published today in the Bank’s Regional Economic Prospects report, which revised the Bank’s aggregate 2025 growth forecast for the EBRD regions downwards by 0.3 percentage points to 3.2 per cent, citing weak external demand, the impact of conflicts and weak reform momentum.
For Türkiye, the report indicates that tighter monetary and fiscal policies have led to a significant reduction in inflation and improvements in the country’s external position, with net exports rising and the current account deficit declining steadily.
However, the report warns against premature loosening of policy measures, with continued high inflation, geopolitical uncertainties and the impact of the real appreciation of the Turkish lira on export competitiveness all posing downside risks to the economy.
At the same time, Türkiye’s high short-term external financing needs also mean that its economic outlook is sensitive to global financing conditions.
The EBRD invested a record €2.6 billion in Türkiye in 2024, driven by the private sector’s appetite for green investments and the Bank’s continuing support for the region affected by the February 2023 earthquake.
The Bank’s cumulative investment in the country passed the €20 billion mark in 2024. It now stands at over €22 billion, with the Bank’s current portfolio in the country totalling more than €8 billion.