The forecasts were published recently in the bank’s Regional Economic Prospects report, which indicates that tighter monetary and fiscal policies have led to a significant reduction in inflation and improvements in the country’s external position, with net exports rising and current account deficit declining steadily.
However, the report warns against premature loosening of policy measures, with continued high inflation, geopolitical uncertainties and the impact of the real appreciation of the Turkish lira on export competitiveness all posing downside risks to the economy, an EBRD release said.
The European Bank for Reconstruction and Development expects Turkiye’s economy to grow by 3 per cent in 2025—unchanged from its September 2024 forecast—and by 3.5 per cent in 2026.
A bank report indicates tighter monetary and fiscal policies have led to a major reduction in inflation and improvements in the external position, with net exports rising and current account deficit falling steadily.
At the same time, Turkiye’s high short-term external financing needs also mean that its economic outlook is sensitive to global financing conditions.
EBRD invested a record €2.6 billion ($2.7 billion) in Turkiye last year, driven by the private sector’s appetite for green investments and the bank’s continuing support for the region affected by the February 2023 earthquake.
The bank’s cumulative investment in the country passed the €20 billion ($20.82 billion) mark in 2024. It now stands at over €22 billion, with the bank’s current portfolio in the country totalling more than €8 billion.
Fibre2Fashion News Desk (DS)
