EBRD cuts Turkiye's 2025 growth forecast to 2.8%

The bank expects the Turkish economy to then grow by 3.5 per cent in 2026, unchanged from previous forecasts.

The forecasts were published in the bank’s regional economic prospects report, which revised the EBRD’s aggregate 2025 growth forecast for its regions of operations down by 0.2 percentage points to 3 per cent. The revision is a result of increased global policy uncertainty, weaker external demand and the direct and indirect effects of announced increases in import tariffs.

Turkiye’s downward revision reflects expectations of tighter domestic financial conditions as heightened uncertainty weighs on domestic demand, as well as weakening external demand due to increased uncertainty around global trade policy. Downside risks stem from still-high inflation and the impact of tighter-for-longer global financial conditions on Turkiye’s substantial short-term external financing needs, EBRD said on its website.

The report notes recent improvements in the economy’s external position, with net exports rising and the current account deficit declining steadily in the 12 months to February 2025. However, inflows of foreign direct investment (FDI) remained relatively low at $12.2 billion.

The EBRD invested a record €2.6 billion (~$2.90 billion) in Turkiye in 2024, driven by the private sector’s appetite for green investments and the bank’s continuing support for regions affected by the February 2023 earthquakes.

The bank’s cumulative investment in the country stands at over €22 billion (~$24.49 billion), with its current portfolio in the country totalling around €8 billion (~$8.91 billion).

ALCHEMPro News Desk (RR)