World Bank raises its growth forecasts for Türkiye

WASHINGTON

In its latest Europe and Central Asia Economic Update, the World Bank has revised upward its growth projections for Türkiye.

The bank lifted its 2025 forecast from 3.1 percent to 3.5 percent, raised its 2026 projection from 3.6 percent to 3.7 percent and increased its 2027 estimate from 4.2 percent to 4.4 percent.

The World Bank said that “growth is expected to recover in Türkiye,” adding that expansion is “set to strengthen as monetary policy loosens and inflation continues to moderate.”

The bank also noted that “with investment recovering alongside resilient consumption, the expansion in Türkiye is becoming more broad-based, signaling a shift toward a more durable and sustainable trajectory.” It highlighted that investment growth is expected to recover moderately, supported by improving activity in construction, underpinned by public investment in reconstruction and urban renewal, as well as resilient housing demand.

The report pointed to Türkiye’s biggest opportunities for growth and job creation in tradable services and logistics, upgrading global value chain–linked manufacturing, renewable energy, care services that increase female participation and digital and ICT-enabled services.

The World Bank said Türkiye could further leverage its strategic location for advanced manufacturing, including the automotive industry, expand renewable energy production and scale its tradable and digitally enabled services sectors.

At the same time, the bank cautioned that “with inflation set to remain above target for the coming years, Türkiye’s central bank is likely to maintain a restrictive policy stance to anchor inflation expectations.”

On fiscal dynamics, the World Bank projected that despite stronger revenue growth, Türkiye’s fiscal deficit will remain above 4 percent of GDP in 2025, with high debt service costs continuing to exert pressure.