- EBRD revises Türkiye forecast upwards to 3.5 per cent for 2023
- Revisions based on strong growth in early 2023
- External imbalances remain
The European Bank for Reconstruction and Development (EBRD) has revised its Türkiye GDP growth forecast to 3.5 per cent for 2023 from a forecast in May of 2.5 per cent.
The upward revision for 2023 reflects strong growth in the first half of the year, driven by pre-election fiscal stimulus, although growth is expected to slow in the second half of the year.
The Bank expects Türkiye’s economy to grow by 3 per cent in 2024.
The forecasts were published today in the Bank’s Regional Economic Prospects report, which includes an expected slowdown in growth in the EBRD regions to an average of 2.4 per cent in 2023.
Despite the expected growth performance, the report highlights remaining external imbalances in Türkiye’s economy, with short-term external debt exceeding US$ 200 billion and the current account deficit standing at US$ 60 billion. Foreign exchange reserves are increasing, but remain modest.
According to the report, a return to orthodox economic policies is a positive signal and the local elections in March 2024 will be a significant factor as they draw closer.
Türkiye has maintained a relatively strong growth performance in recent years but is seeing a slowdown. In the first half of 2023, GDP growth decelerated from 5.6 per cent in 2022 to 3.9 per cent year on year. In addition, inflation declined but remains elevated and is expected to rise to 60 per cent by the end of 2023.
To date, the EBRD has invested more than €18 billion in various sectors of the Turkish economy, largely in the private sector.