OECD revises Turkey's growth expectations upward

The Organisation for Economic Co-operation and Development (OECD), in its Economic Outlook report titled "Resilient Growth but with Increasing Vulnerabilities," estimated that the Turkish economy grew by 3.3 percent in 2024 and projected growth of 3.6 percent this year, 3.4 percent in 2026, and 4 percent in 2027. These estimates have been revised upward compared to previous assessments made in September.

According to the OECD report, the impact of high U.S. customs tariffs on Turkey's exports is expected to be limited and short-term. Furthermore, with the improvement of financial conditions, private consumption and investments are projected to increase in 2026 and 2027. Inflation is expected to decline to 34.5 percent this year, 20.8 percent in 2026, and 11.7 percent in 2027.

With the Central Bank of the Republic of Turkey (TCMB) beginning interest rate cuts, it is estimated that monetary policy will become more supportive in the third quarter of 2025, and that lower inflation will allow for additional interest rate cuts in 2026 and 2027. However, it is emphasized that a tight monetary policy must be maintained until inflation falls permanently. The TCMB's policy rate is projected to fall to 25 percent by the end of 2026 and to 17 percent by the end of 2027.

While the budget deficit is expected to decline to 2.8 percent in 2027, the current account deficit is estimated to be 3.3 percent in 2026 and 3.4 percent in 2027. The unemployment rate is expected to fall to 8.1 percent in 2027.

RESILIENCE CONTINUES IN THE GLOBAL ECONOMY

The OECD projects that the global economy will grow by 3.2 percent this year and 2.9 percent in 2026. In 2027, growth of 3.1 percent is expected. It is noted that the global economy is performing stronger than expected, but vulnerabilities persist. While the U.S. economy is expected to grow by 2 percent this year and 1.7 percent in 2026, growth in the Eurozone is projected to be 2 percent in 2027.

News Source: 12punto