EU Releases Report on Turkey

The European Commission forecasts that Turkey's economic growth will slow down by 2025, while unemployment is expected to rise.

In its "Spring Economic Forecast 2025" report, the European Commission has revised down its projections for Turkey's economic growth. According to the report, Turkey's economic growth will be about 2.8% in 2025. By 2026, growth is expected to recover to 3.5%.

The report highlights that Turkey's economy is attempting to stabilize through recently implemented financial and monetary policies; however, domestic political uncertainty puts pressure on financial markets. This situation is noted as potentially negatively impacting economic growth.

Household consumption is expected to see moderate growth of around 3.5%, coinciding with gradual improvements in financial conditions. Nevertheless, the report also emphasizes that high real interest rates are putting pressure on private sector investments. The slowdown in reconstruction efforts following the earthquake and the limitations on state spending are mentioned as factors constraining growth.