Gov’t forecasts 5.3 growth in 2023-25

ANKARA

The Turkish economy is expected to grow 5.3 percent on average between 2023-25, according to the government’s medium-term program.

The economy will expand 5 percent this year and next and the growth rate is forecast to accelerate to 5.5 percent in 2024 and 2025, said the program, which was unveiled on Sept. 4.

The program projects that the size of the Turkish economy will reach $1 trillion in 2025 and per capital income will rise from $10,071 in 2023 to $12,091.

The economy grew by 7.6 percent in the second quarter of 2022, accelerating from the 7.5 percent expansion recorded in the first quarter. The quarterly growth also quickened from 0.7 percent in January-March to 2.1 percent in April-June.
The annual inflation rate will ease to 24.9 percent next year after touching 65 percent in 2022, according to the program. The government forecasts inflation to drop further to 13.8 percent in 2024 and down to 9.9 in 2025.

Türkiye’s energy import is expected to climb to $103.5 billion in 2022 but will decline to $85 billion and $83.9 billion in 2023 and 2024, respectively, based on the assumption that the price of Brent crude oil will be $88/barrel next year and $83.9 in 2024.

The government foresees that export revenues will hit $265 billion next year and $285 billion in 2024. In 2025, revenues will rise to $305 billion.

The country’s current account deficit, according to the medium-term program, will shrink from $47.3 billion - or 5.9 percent of GDP - this year to $22 billion - 2.5 percent of GDP - next year. The current account gap is seen at $10 billion -0.9 percent of national income - in 2025.

Imports are expected to decline from $360 billion this year to $345 billion in 2023 and climb up to $363 billion in the following year and to $384 billion in 2025.

The government predicts that the central government budget will produce a deficit of 659.4 billion Turkish Liras - 3.5 percent of GDP - in 2023, up from a deficit of 461 billion liras - 3.4 percent of GDP - in 2022. The deficit will shrink to 582 billion liras in 2024 and to 409 billion in the following year, according to the program.

The country’s unemployment rate will remain a little above 10 percent next year but will decline to 9.9 percent in 2024 and to 9.6 percent in 2025, the government estimates.

“We have not compromised on budget discipline when preparing the medium-term program,” said Treasury and Finance Minister Nureddin Nebati.

The program is based on the Türkiye Economy Model, which prioritizes growth and job creation and aims to boost value-added production and puts the export-focused sustainable growth at its center, he added.