The Bank increased its growth forecast for the Turkish economy from 2.7% to 3.2% for this year, and from 4% to 4.3% for 2024.
The World Bank raised its growth forecasts for Turkiye’s economy from 2.7% to 3.2% this year.
The Bank has published the Economic Update Report it has prepared for the Europe and Central Asia region.
In the report, which also includes forecasts for the Turkish economy, it was reported that the country’s economy is expected to grow by 3.2% this year and 4.3% in the next.
The World Bank, in its forecasts in January, had predicted that the Turkish economy would grow by 2.7% in 2023 and 4% in 2024.
In the report, it was noted that the Turkish economy is estimated to grow by 4.1% in 2025.
In the report, which is estimated to have caused approximately $34.2 billion of damage due to the earthquakes that took place in Turkiye on February 6, it was reported that this corresponds to 4% of the country’s Gross Domestic Product (GDP) in 2021.
In the report, it was stated that the real cost of all improvement and reconstruction work could be twice as much as the direct damage, and it was stated that the growth rate is expected to increase to an average of 4.2% in 2024-2025 thanks to the support provided by the government to households and investments for the ongoing reconstruction work.
Economic activity in the Europe and Central Asia region is expected to remain stagnant this year
On the other hand, it was stated in the report that economic activity in the Europe and Central Asia region is expected to remain stagnant this year due to the continuing effects of the war launched by Russia in Ukraine, stubbornly high inflation and tightening financial conditions.
In the report, which stated that the economy of the Europe and Central Asia region is estimated to grow by 1.2% in 2022, it was noted that the growth expectations for the regional economy were 1.4% for this year and 2.7% for the years 2024 and 2025.
In its January forecasts, the World Bank had predicted that the economy of the Europe and Central Asia region would grow by 0.1% in 2023 and by 2.8% in 2024.
In the report, it was stated that the increase in the growth expectation of the regional economy for this year was due to the relaxation observed in the contraction in the Russian economy and the improvement in Ukraine’s outlook.
In the bank’s report, it was stated that the regional growth rate is expected to increase to 2.7% on average in 2024-2025, with the decrease in inflation, the recovery of domestic demand and the improvement of the external environment.
In the report, which pointed out that the outlook is still quite uncertain, it was stated that growth in 2023 could be even weaker if the ongoing war in Ukraine escalates, food and energy prices continue to rise, interest rates accelerate globally or in the region, or a sudden reversal of capital flows to the region.
The report also warned that the current developments in the field of banking in some developed economies may have an impact on growth.
Source: AA / Prepared by Irem Yildiz