EBRD’s 2025 growth forecast for Türkiye unchanged

LONDON

The European Bank for Reconstruction and Development (EBRD) expects Türkiye’s economy to grow by 3 percent in 2025, unchanged from its September 2024 forecast.

The bank expects the Turkish economy to then grow by 3.5 percent in 2026.

These forecasts were published on Feb. 27 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 percent, 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 bank said.