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 | 3.0 | 3.5 | 4.5 | 5.0 |
| GDP per capita (EUR at PPP) | 24510 | 27460 | . | . | . | . |
| Gross industrial production, real change in % | 5.0 | 1.6 | . | . | . | . |
| Unemployment rate - LFS, in %, average | 10.5 | 9.4 | 8.8 | 9.0 | 9.0 | 8.8 |
| Average gross monthly wages, EUR | 590 | 639 | . | . | . | . |
| Consumer prices, % p.a. | 72.3 | 54.0 | 58.5 | 31.0 | 24.0 | 13.0 |
| Fiscal balance in % of GDP | -1.1 | -5.2 | -4.8 | -3.8 | -3.5 | -2.6 |
| Public debt in % of GDP | 30.8 | 29.3 | . | . | . | . |
| Current account in % of GDP | -5.0 | -3.6 | -1.2 | -2.4 | -3.4 | -4.0 |
| FDI inflow, EUR m | 13027 | 10180 | . | . | . | . |
| Gross external debt in % of GDP | 49.5 | 43.8 | . | . | . | . |
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. 1/2025
Vasily Astrov, Alexandra Bykova, Selena Duraković, Meryem Gökten, Richard Grieveson, Maciej J. Grodzicki, 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. 1, January 2025
50 pages including 6 Tables and 13 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
Due to tight financial conditions, growth weakened further in Q3 2024, with GDP rising by only 2.1% year on year. The Turkish Statistical Institute revised Q2 growth downwards to -0.2% quarter on quarter and a similar outturn was recorded in Q3, so that Turkey found itself in a technical recession. Net exports remained the main positive contributor to growth, owing to a sharp contraction in imports. However, recent high-frequency indicators – such as the Purchasing Managers’ Index, manufacturing capacity utilisation and consumer confidence – have shown a slight uptick, suggesting that Q4 did not see a further growth slowdown. Meanwhile, the unemployment rate remained stable in 2024, keeping below pre-pandemic levels. Annual inflation fell to 44.4% in December 2024, while monthly inflation stood at 1.03%, marking the lowest level since May 2023. In the same month, the central bank cut its policy rate for the first time in nearly two years, from 50% to 47.5%. It also announced that it would hold only eight meetings in 2025 (instead of 12), signalling a slower rate-cut cycle. The uncertainties surrounding the new Trump administration pose a risk to Turkey’s soft-landing efforts. Tighter external financial conditions (slower rate cuts by the Fed and a strong US dollar), combined with weak external demand due to potential high tariffs, could extend the period of tighter domestic financial conditions and prolong the disinflation process. Given all these factors, growth is expected to remain subdued in 2025: we have revised our forecast downward, to 3.5%. However, with the easing of inflation and financial conditions expected in 2026, we expect growth to pick up and reach 4%, unchanged from our autumn forecast.