EBRD Forecasts 3% Growth for Turkish Economy in 2025

The European Bank for Reconstruction and Development (EBRD) has projected Turkey’s economy to grow by 3.0% in 2025, with an upward revision to 3.5% in 2026, according to its latest report.

Economic Outlook and Key Drivers

The report highlights tight monetary and fiscal policies as key factors contributing to a significant decline in inflation and an improved external position for Turkey. Additionally, net exports have risen, and the current account deficit has steadily decreased.

Despite these positive developments, the EBRD cautioned against premature policy easing, citing:

  • Persistently high inflation
  • Geopolitical uncertainties
  • The Turkish lira’s real appreciation, which could affect export competitiveness
  • High short-term external financing needs, making Turkey vulnerable to global financing conditions

EBRD’s Investment in Turkey Reaches Record Levels

The EBRD invested a record €2.6 billion in Turkey in 2024, primarily driven by private sector interest in green investments and the Bank’s continued support for regions affected by the February 2023 earthquake.

The Bank’s total investment in Turkey surpassed €22 billion in 2024, with a current portfolio exceeding €8 billion.

Regional Context and Growth Trends

The EBRD lowered its total growth forecast for its regions in 2025 by 0.3 percentage points to 3.2%, attributing the downgrade to weak external demand, ongoing conflicts, and slow reform momentum.

While Turkey’s economic resilience has improved, maintaining policy discipline will be crucial in navigating global and domestic challenges.

Source: foreks.com

Translation: Cem Cetinguc