Turkey sees 2026 GDP growth at 3.8%; saw 4.5%

Turkey sees 2026 GDP growth at 3.8%; saw 4.5%

Turkey's economic growth in 2025 has shown mixed results, with significant variations in quarterly performance. The Turkish economy expanded 4.8% year-on-year in the second quarter, outpacing market expectations of 4.1% and accelerating from a revised 2.3% in the previous quarter. This robust growth was driven by stronger household consumption, a surge in investment, and rising exports and imports. However, government spending contracted sharply, dragging on overall growth [2].

In contrast, the Turkish economy expanded 2% year-on-year in the first quarter, the smallest growth rate since a contraction in Q2 2020. Household spending, government expenditure, and investment slowed significantly, while exports stalled and imports rose at a faster pace. The industrial sector contracted, and the services sector's growth slowed [2].

Despite these fluctuations, the Turkish economy has shown resilience in the face of political headwinds. The central bank has implemented an aggressive rate policy, raising its main interest rate three times this year, with the last hike in April to 49% from 46%. However, political developments, including the crackdown on opposition parties and the detention of Istanbul Mayor Ekrem Imamoglu, have posed challenges to the economy and investor sentiment [1].

Looking ahead, the Turkish economy is expected to grow 2.6% by the end of 2025, according to Trading Economics global macro models and analysts' expectations. In the long term, the GDP Annual Growth Rate is projected to trend around 4.5% in 2026 and 5.1% in 2027 [2].

References:
[1] https://www.benzinga.com/markets/asia/25/09/47527281/turkish-gdp-outpaces-europes-largest-economies-as-growth-beats-q2-forecasts
[2] https://tradingeconomics.com/turkey/gdp-growth-annual