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International credit rating agency Fitch Ratings raised its growth forecast for Türkiye's economy to 3.5% for 2025, up from 2.9%, following stronger-than-expected performance in the second quarter of this year, according to the agency's Global Economic Outlook Report released in September.
The upgrade comes as Fitch also revised upward its global economic growth expectations to 2.4% for this year from 2.2% and to 2.3% for next year from 2.2%.
The report, titled "Global Growth Forecasts Revised Up But U.S. Economy Slowing," reflects improved economic data from the second quarter of 2025 across multiple markets.
Fitch projects Türkiye's economy will maintain 3.5% growth in 2026 before accelerating to 4.2% in 2027, according to the report.
The agency noted that annual inflation in Türkiye continues to decline, with year-end inflation expected to slow to 28% for 2025 based on current monthly trends.
Inflation projections show further deceleration to 21% for 2026 and 19% for 2027.
Regarding monetary policy, Fitch expects the Central Bank of the Republic of Türkiye (CBRT) to cut its policy rate by a total of 800 basis points across three policy meetings this year, ending the year at 35%.
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Despite the upward revisions, Fitch still expects a significant global economic slowdown this year.
The agency projects world economic growth to decelerate from 2.9% last year to 2.4% this year and 2.3% next year, before recovering to 2.6% in 2027.
In June, Fitch had forecast global economic growth of 2.2% for both this year and next year.
Fitch projects the Eurozone economy will grow 1.1% both this year and next year, followed by 1.2% growth in 2027.
The report notes that Eurozone exports are unlikely to maintain their first-half 2025 momentum, and with a weakening consumer recovery, economic growth is not expected in the second half of this year.
China's export growth remains strong despite U.S. tariff shocks, according to the report, with fiscal easing supporting growth.
However, private domestic demand growth appears to be weakening, and deflation is becoming increasingly persistent.
Fitch forecasts China's economy will grow 4.7% this year and 4.1% in both next year and 2027.
The report indicates data is providing evidence of a slowdown in the U.S. economy, with growth expected to decelerate from 2.8% last year to 1.6% for both this year and next year, before recovering to 2.1% in 2027.
While the impact of higher effective tariff rates on consumer inflation remains limited so far, Fitch expects this to increase later in the year.
"High inflation will slow real wage growth and negatively affect consumer spending, which has already slowed significantly in 2025," the report stated, adding that employment growth has also slowed markedly.
The weakening labor market could convince the Federal Reserve to cut interest rates faster than expected, with 25 basis point cuts anticipated in September and December, followed by three more rate cuts in 2026.
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