Growth forecasts announced: Expectations remain unchanged

The European Bank for Reconstruction and Development (EBRD) has released its Regional Economic Outlook report, which evaluates the economic situation of the countries in which it operates.

The bank kept its growth forecast for the Turkish economy unchanged at 2.7 percent for 2024 and 3 percent for 2025. While these rates remain at the same level as the EBRD's forecasts made in May, it was pointed out that investor confidence in the Turkish economy has shown improvement.

The report stated that changes in Turkey's macroeconomic policies and the country's removal from the grey list have contributed to investor confidence. Additionally, the decline in Turkey's 5-year credit default swap (CDS) premium was highlighted as a positive development.

ECONOMIC RISKS AND CREDIT CONDITIONS

The EBRD report also addressed risks for the Turkish economy. The persistence of high inflation, the negative effects of the real appreciation of the Turkish lira on exports and tourism, geopolitical tensions in the region, and the high need for short-term external financing were listed as the primary risks to the country's economy.

Furthermore, while it was noted that the current account deficit has decreased, it was emphasized that short-term external debt remains high.

INVESTMENT RECOMMENDATION FOR THE PRIVATE SECTOR

The report also included the EBRD's recommendations for Turkey. It was stated that Turkey needs to increase productivity, improve human capital development, and expand the private sector's access to finance.

The EBRD announced that it invested 2.5 billion euros in Turkey in 2023, and more than half of this investment was allocated to green transition projects. The bank's total investments in Turkey have exceeded 20 billion euros.

News Source: 12punto