World Bank forecasts 3 pct growth for Türkiye this year

ISTANBUL

World Bank President Ajay Banga with Finance Minister Mehmet Şimşek in Ankara on June 11.

The World Bank has lowered its growth projection for the Turkish economy for 2024 from a previous 3.1 percent to 3 percent.

In its Global Economic Prospects Report released on June 11, the bank also cut the GDP growth forecast for 2025 from 3.3 percent in January to 3 percent.

The bank expects the Turkish economy to expand by 4.3 percent in 2026.

Economic activity has remained resilient into 2024, supported by a significant rise in the minimum wage — the fifth increase since 2022 — despite monetary policy tightening, the World Bank said in the report.

Growth in Türkiye is projected to moderate in 2024 as the tightening of monetary policy feeds through to the economy and contributes to reducing macroeconomic vulnerabilities, it added.

Inflation will remain above the Central Bank’s target, easing only to 29 percent on average in 2025, according to the bank.

The fiscal deficit is expected to remain elevated, partly reflecting the costs of assisting rehabilitation and reconstruction following the February 2023 earthquakes, the bank said.

Meanwhile World Bank President Ajay Banga met with President Recep Tayyip Erdoğan and Finance Minister Mehmet Şimşek in Ankara.

“We had a productive meeting with Mr. Ajay Banga, where we discussed the 2024-2028 Country Partnership Framework,” Şimşek wrote on X.

They discussed the collaborations that can be developed in areas such as energy transformation, infrastructure, supporting SMEs and employment ⁠as well as resilient cities, the minister added.

Türkiye ranks second in the world and first in the region in terms of active portfolio size at the World Bank, Şimşek noted.

“We thank the World Bank for its trust in our program and the support it provides to our country,” said Şimşek.