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The European Bank for Reconstruction and Development raised its 2025 growth forecast for Türkiye's economy to 3.1% and projected 3.5% growth for 2026.
The EBRD increased its current-year growth projection by 0.3% points from its previous estimate, according to the bank's Regional Economic Prospects report, released on Thursday.
The upward revision for 2026 represents a 0.7% point increase from earlier forecasts.
The improved outlook reflects easing tensions in Syria and the Caucasus region, closer cooperation with the European Union, and developments in Türkiye's construction, logistics, and defense sectors, the report stated.
Variable risk perception and tightening global financing conditions remain key risks for the Turkish economy.
Turkish central bank Governor Fatih Karahan emphasized that disinflation continues despite existing risks during a presentation in New York titled "Monetary Policy and Inflation Outlook in Türkiye."
Core inflation indicators point to further disinflation ahead, Karahan said.
He noted that monthly service inflation would likely increase with the return of the school season, while adverse weather conditions have negatively impacted food prices.
"The disinflation process continues, but risks remain alive," Karahan said, referencing the rebalancing of demand in the economy.
The central bank will maintain its tight monetary policy stance until price stability is achieved, strengthening the disinflation process through demand, exchange rate and expectations channels, according to Karahan.
He warned that monetary policy would be tightened further if there were a significant deviation from interim inflation targets.
1 min read
The EBRD revised its regional economic growth forecast to 3.1% for 2025, up 0.1 percentage point from its May 2025 projection.
The adjustment reflects ongoing global geopolitical tensions, increased competition from China in export markets, and limited fiscal space constraints.
The bank expects economic growth in its operating countries to rise to 3.3% in 2026.
The revision comes amid challenging global economic conditions affecting emerging markets across the region.
The EBRD's total investment in Türkiye exceeds €22.4 billion ($26.3 billion), with its current portfolio in the country standing at approximately €8 billion ($9.3 billion).
The bank has been a significant development partner for Türkiye since beginning operations in the country.
The forecast adjustments signal cautious optimism about Türkiye's economic trajectory while acknowledging persistent challenges in the global economic environment.
6 min read
