World Bank growth forecast for Turkey

The report points out that the global economy is in a better place than it was a year ago, noting that the risk of a global recession has decreased largely due to the strength of the U.S. economy, but warns that rising geopolitical tensions could create new dangers for the world economy in the short term.

The report states that the medium-term outlook for many developing economies is darkening due to slowing growth and global trade in most major economies, as well as the tightest financial conditions seen in decades.

Noting that global trade growth this year is expected to be only half of the average of the 10 years prior to the pandemic, the report indicates that borrowing costs for developing economies are likely to remain high and that global interest rates, adjusted for inflation, are likely to be at their highest levels in 40 years.

The report notes that global growth is expected to slow for the third consecutive year, with global growth, estimated at 2.6 percent for last year, projected to be 2.4 percent in 2024 and 2.7 percent in 2025.

In the report published by the World Bank last June, the growth expectation for the global economy was 2.1 percent for 2023, 2.4 percent for 2024, and 3 percent for 2025.

GROWTH EXPECTATION IN DEVELOPED COUNTRIES IS 1.2 PERCENT

The report states that developing countries are expected to record 3.9 percent growth this year, low-income countries 5.5 percent, and developed countries 1.2 percent, adding that by the end of 2024, one in every four developing countries and about 40 percent of low-income countries will have higher poverty levels than in the pre-pandemic period of 2019.

Emphasizing that developing countries need to increase investments by approximately 2.4 trillion dollars per year to combat climate change and achieve other key global development goals by 2030, the report provides a global analysis of what is required for a sustainable investment boom, drawing on the experiences of 35 developed and 69 developing economies over the last 70 years.

The report forecasts that the U.S. will grow by 2.5 percent in 2023, 1.6 percent this year, and 1.7 percent next year, while Japan is projected to record growth of 1.8 percent, 0.9 percent, and 0.8 percent, respectively, over the same period.

While it was stated that China's growth was expected to be 5.2 percent last year, it is estimated to be 4.5 percent in 2024 and 4.3 percent in 2025.

GROWTH FORECAST FOR TURKEY

The report states that Turkey is expected to grow by 4.2 percent in 2023, 3.1 percent in 2024, and 3.9 percent in 2025.

Commenting on the report, World Bank Group President Ajay Banga underscored that the surest way to reduce poverty and spread prosperity is through employment, noting that slower growth makes job creation more difficult.

Banga stated, "It is important to keep in mind that growth forecasts are not destiny. We have an opportunity to turn things around, but it will require all of us to work together."

Indermit Gill, Chief Economist and Senior Vice President of the World Bank Group, stated that the world economy is in a precarious position, pointing out that debt pressures are increasing in emerging markets and developing economies due to high interest rates.

Noting that fiscal weaknesses have already pushed many low-income countries into debt distress, Gill emphasized that the financing needs required to achieve sustainable development goals are far greater than even the most optimistic projections.

Ayhan Köse, Deputy Chief Economist of the World Bank Group, also stated that most developing economies are struggling to cope with weak growth, persistently high inflation, and record debt levels, adding, "Policymakers in these economies must act immediately to prevent financial contagion and reduce short-term domestic vulnerabilities."