European Union's inflation forecast for Turkey

The European Commission's 'Autumn 2023 European Economic Forecast' report has been published. According to the report, inflation in Turkey is projected to be 55.4 percent this year, 53.6 percent in 2024, and 22.9 percent in 2025.

In the report titled 'A moderate recovery after a challenging year,' it is projected that the EU economy will grow by 0.6 percent in 2023 and 1.3 percent in 2024, while the Eurozone economy is expected to grow by 0.6 percent in 2023 and 1.2 percent in 2024.

In the European Commission's previous 'Summer' report, it was estimated that the EU would grow by 0.8 percent this year and 1.4 percent next year, and the Eurozone would grow by 0.8 percent this year and 1.3 percent next year.

With the latest report, the growth forecasts for the EU and the Eurozone for 2023 and 2024 have been revised downward.

"DIFFICULTIES MAY ARISE IN ADAPTING TO HIGH INTEREST RATES"

The report noted that the Russia-Ukraine war and conflicts in the Middle East have increased uncertainty and downside risks to the economic outlook.

While the report stated that the impact of these developments on energy markets is currently limited, it also indicated that there is a risk of disruption in energy supply.

The report pointed out that economic developments in the EU's major trading partners, particularly China, could also pose risks. It was reported that monetary tightening in Europe might weigh on economic activity for longer and more heavily than anticipated, and that firms, households, and public finances might struggle to adapt to the high-interest-rate environment.

SINGLE DIGITS NOT IN SIGHT

The report mentioned that weather events such as heatwaves, wildfires, droughts, and floods are negatively affecting the economy along with the environment, and stated that steps taken toward more stability-oriented macroeconomic policies in Turkey have begun to curb strong growth in domestic demand.

In the report, it is projected that the Turkish economy will grow by 4.2 percent in 2023, 3.5 percent in 2024, and 4 percent in 2025, and that inflation will be 55.4 percent this year, 53.6 percent in 2024, and 22.9 percent in 2025.