Turkey
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
| Population, 1000 persons | 84980 | 85326 | 85519 | . | . | . |
| GDP, real change in % | 5.5 | 5.1 | 3.2 | 3.4 | 4.0 | 4.5 |
| GDP per capita (EUR at PPP) | 24510 | 27460 | 29180 | . | . | . |
| Gross industrial production, real change in % | 5.0 | 1.6 | 0.4 | . | . | . |
| Unemployment rate - LFS, in %, average | 10.4 | 9.4 | 8.7 | 9.0 | 9.0 | 8.8 |
| Average gross monthly wages, EUR | 590 | 639 | 741 | . | . | . |
| Consumer prices, % p.a. | 72.3 | 54.0 | 58.5 | 35.0 | 24.0 | 14.0 |
| Fiscal balance in % of GDP | -1.1 | -5.2 | -4.9 | -3.8 | -3.5 | -2.6 |
| Public debt in % of GDP | 30.8 | 29.3 | 24.7 | . | . | . |
| Current account in % of GDP | -5.0 | -3.6 | -0.8 | -2.0 | -3.0 | -3.5 |
| FDI inflow, EUR m | 13153 | 9868 | 10421 | . | . | . |
| Gross external debt in % of GDP | 48.8 | 43.1 | 40.7 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.
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Monthly Report No. 7-8/2025
Vasily Astrov, Alexandra Bykova, Selena Duraković, Meryem Gökten, Richard Grieveson, Maciej Grodzicki, Ioannis Gutzianas, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Dzmitry Kruk, Sebastian Leitner, Isilda Mara, Emilia Penkova-Pearson, Olga Pindyuk, Sandor Richter, Marko Sošić, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2025
38 pages including 5 Tables and 3 Figures
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Executive summary
Olga Pindyuk
in: The Crisis is Over, but its Scarring Effects are Hindering Recovery
wiiw Forecast Report No. Spring 2024, April 2024 , pp. I-VII
Details
The economy grew by 2% year on year in Q1, driven by household and government consumption, while net exports continued to weigh heavily on growth. Activity was supported by the construction and service sectors, whereas agriculture and industry contracted (by -2% and -1.8% year on year, respectively). Unemployment rose, partly due to the weakening in industry. While Q1 data point to a modest loss of momentum compared to the previous quarter, high-frequency indicators suggest a further slowdown in Q2. Higher borrowing costs, driven by the recent political turmoil, have put pressure on industrial output, while declining real wages and rising unemployment have continued to weigh on private consumption. The central bank has reaffirmed its hawkish stance amid persistent political uncertainty and elevated exchange-rate risks. Despite softer inflation in May (35.4% year on year; 1.5% month on month), we expect rate cuts to begin no earlier than September. On the political front, uncertainty persists following the arrest of Istanbul Mayor Ekrem İmamoğlu, though market reaction has now stabilised. Since May, the lira has been steady and the 10-year bond yield has started to decline. However, the legal crackdown against the main opposition party, the CHP, has intensified, extending beyond the Istanbul municipality. Prosecutors have challenged the results of the 2023 CHP congress, citing vote-buying and procedural irregularities. The annulment of the results and any resulting leadership change – either with a government-appointed trustee or through the return of former party leader Kemal Kılıçdaroğlu – would deepen internal divisions and risk undermining the party’s recent electoral gains. Given the recent data, we have made a downward revision to our 2025 GDP growth forecast (to 3.4% – 0.1 percentage points lower) and our inflation forecasts (to 35% in 2025 and 24% in 2026 – in both cases, 1 percentage point lower).