The European Bank for Reconstruction and Development (EBRD) increased its 2023 growth forecast for the Turkish economy to 3.5%.
In EBRD’s Regional Economic Outlook report, it was predicted that growth would decrease to an average of 2.4% this year in the regions where the Bank operates, including Turkiye.
The 2.5% growth forecast announced by the bank for this year for the Turkish economy in May was increased to 3.5%.
The report stated that the upward revision reflected the strong growth in the first half of the year with the effect of the pre-election financial revival, and it was predicted that the Turkish economy would grow by 3% in 2024.
The report noted that external financing imbalances continued due to the short-term external debt exceeding $200 billion and the current account deficit remaining at $60 billion against the expected growth performance, while it was stated that foreign exchange reserves increased but remained modest.
Economic policies give positive signals
The report saw the return to orthodox economic policies as a positive signal and stated that the local elections in March 2024 will be an important factor.
While EBRD economists stated that Turkiye has exhibited a relatively strong growth performance in recent years, but a slowdown has been observed, the report noted that the growth of the Turkish economy decreased to 3.9% in the first half of 2023, from 5.6% in the same period of the previous year.
EBRD’s investments in Turkiye are at the level of €18 billion, most of which are in the private sector.
Source: Trthaber / Prepared by Irem Yildiz