Ankara: The European Commission has forecasted that Turkey's economic growth will maintain its resilience, with an expansion rate of 3.4% anticipated for the current year and 2026, and a projected increase to 4% in 2027. Despite a stringent monetary policy, domestic demand showed strength in the first half of 2025.
According to Anadolu Agency, the European Economic Forecast Autumn 2025 report highlighted that Turkey experienced an annual economic growth of 4.8% in the second quarter. Household consumption and investment growth rates were recorded at 5.1% and 8.8% annually, respectively. The report expects the economic performance to stay largely unchanged in the third quarter. By the end of the year, growth is projected to slow to 3.4%, with household consumption cited as the primary growth driver. This growth is anticipated to be supported by wealth effects from high gold prices and ongoing employment gains.
Investments in Turkey are expected to rise steadily as financial conditions and the economic outlook improve. The trade and current account deficits are predicted to remain generally stable. Employment growth is projected to accelerate gradually, with unemployment remaining around 8.6% from 2025 to 2027.
The disinflation process continues to be a priority for Turkish policymakers. The report noted that annual inflation in September rose to 33.3%, driven by increases in food prices, persistent service inflation, and rising gold prices. The fight against inflation is supported by a tight monetary policy stance. The commission expects annual inflation to decrease slowly over the next two years, averaging 24.8% in 2026 and 17.7% in 2027.
The report acknowledges that the Turkish economy has managed to navigate high geopolitical and domestic uncertainties successfully in recent years. Although internal political tensions in the spring caused financial turmoil, the markets stabilized relatively quickly. The political situation remains volatile, and risks, both domestic and external, are high. However, the commission suggests that Turkey's recent track record of sound policies, reduced economic imbalances, and higher buffers might help the country face these challenges if the orthodox economic policy stance is firmly maintained.
For the overall EU economy, the report indicated that economic growth exceeded expectations from January to September, estimating a growth rate of 1.4% for the entire year and 2026, with an increase to 1.7% in 2027.