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The United Nations (U.N.) projected Türkiye's economy will grow 3.9% in 2026 and 4.1% in 2027, while inflation is expected to continue declining but remain in double digits at 22.4% in 2026 and 19.8% in 2027, according to the World Economic Situation and Prospects 2026 report.
"Growth in Türkiye will remain moderate amid subdued demand, policy tightening, and large external financing needs," the report stated.
"In Türkiye, growth is expected to remain moderate, with robust private demand (supported by monetary easing) tempered by tight fiscal policy and large external financing needs. The regional outlook remains highly vulnerable to geopolitical risks, as persistent conflicts and security tensions continue to undermine confidence and disrupt trade and investment flows," the report noted.
According to UN estimates, Türkiye's economy grew 3.7% in 2025. The report noted that despite a tight monetary and fiscal policy stance, weak external demand, and large external financing needs, domestic demand remained resilient in 2025.
"Consumer confidence reached its highest level since the second quarter of 2023. Private consumption continued to expand, supported by robust spending on durable goods and services, while public consumption was weak," the report noted.
"Investment strengthened, driven by construction and spending on machinery and equipment. Growth was led by the services sector, notably tourism, trade and transport, and supported by a rebound in industrial production in the second quarter," the report added.
However, the U.N. report noted that growth momentum is estimated to have weakened in the second half of the year.
"The Manufacturing PMI declined to 46.5 in October, indicating a slowdown in manufacturing activity and weak demand conditions. New orders and export demand remained subdued, leading to a marked slowdown in manufacturing output by the end of the third quarter of 2025," the report stated.
The U.N. projected inflation in Türkiye will continue declining but remain in double digits in 2026.
"Headline inflation remained below expectations in November 2025, following an uptick in September, indicating that the country's disinflation process—underway since June 2024—has continued, albeit at a slower pace. Services inflation remains elevated, reflecting rigidity in housing prices and notable increases in transportation and education costs," the report noted.
The report also noted that the Central Bank of the Republic of Türkiye (CBRT) continued to lower policy rates despite still elevated inflationary pressures and rising macroeconomic risks.
The U.N. highlighted Türkiye among economies showing notable improvement in inflation reduction.
"While some developing countries still face double-digit and even triple-digit inflation, the share of economies with such high rates fell from about 24% in 2024 to 18% in 2025 and is expected to decline further in 2026, with notable improvements in economies such as Argentina and Türkiye," the report stated.
The report noted that fiscal consolidation efforts in Türkiye narrowed the fiscal deficit from 4.6% of GDP in 2024 to 3.7% in 2025, reflecting improved revenue performance and tighter expenditure control.
Under the Government's Medium-Term Program (2026-2028), authorities have identified key policy objectives, including strengthening macroeconomic and financial stability, maintaining fiscal discipline, and achieving price stability.
"Disinflation will remain a policy priority during the forecast period, implying the continued tightening of monetary and fiscal policies," the report stated.
The report noted that growth moderation in Türkiye was accompanied by weaker job creation.
"In Türkiye, the slowdown in economic activity has led to weaker job creation, with the unemployment rate stabilizing at around 8.6% since the second quarter of 2024," the report stated.
The report also noted that Türkiye was among markets that helped cushion the decline in EU automobile exports.
"The European Union saw a nearly 6% drop in automobile exports, driven by steep declines in shipments to China (-34%) and the United States (-18%). The sectoral impact was partly cushioned by modest growth in exports to markets such as Japan, Norway, and Türkiye," the report stated.
The report noted that in Argentina and Türkiye, authorities pursued monetary easing while seeking to anchor inflation expectations through managed currency depreciation.
"With inflation still elevated, however, the path of easing in 2026 is likely to remain challenging for both economies," the report stated.
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