The European Bank for Reconstruction and Development (EBRD) has upgraded its growth outlook for Türkiye as the macroeconomic stabilization program balances growth and disinflation objectives, it said in a report published on Thursday, citing also a better-than-expected performance in 2025.
Real gross domestic product (GDP) growth is now projected to accelerate and stand at 4.0% in 2026 and 4.5% in 2027, the bank said in its report covering regional prospects. Earlier, in the report from September 2025, the bank predicted Türkiye's growth to be at 3.5% this year.
"In Türkiye, growth picked up from 3.3% in 2024 to an estimated 3.7% in 2025, reflecting better-than-expected outturns across most sectors despite episodes of market volatility and a tight fiscal and monetary policy mix," the EBRD said.
Strong private consumption and investment offset lower net exports on the demand side, while weak agricultural performance was compensated for by stronger activity in other areas of production.
Financial conditions stabilized and investor confidence recovered in the second half of 2025, the bank suggested, as evidenced by narrower credit default swap (CDS) spreads and improved access to international capital markets. Meanwhile, gross international reserves climbed above $200 billion for the first time, it added.
The EBRD, in its report, also pointed out that the seasonally adjusted unemployment rate fell from 8.6% at the end of 2024 to 7.7% at the end of 2025 and that headline annual inflation declined from its May 2024 peak of 75.5% to 30.9% in December 2025, supported by tight monetary conditions.
Meanwhile, average growth in the EBRD regions picked up to stand at an estimated 3.4% in 2025, with the bank expecting average growth to rise to 3.6% in 2026 and 3.7% in 2027.
The economies where the EBRD invests are continuing to navigate global trade tensions and geopolitical uncertainty, while resilient domestic demand and rapid adjustments in global supply chains are supporting economic activity.
The EBRD is one of Türkiye’s key investors, with more than 23 billion euros ($27.1 billion) committed across the country since 2009, largely in the private sector.
Meanwhile, the bank also said that the economic impact of U.S. President Donald Trump's tariffs was "much lower" than expected last year, as it raised its growth forecast for 2026.
The U.S. Supreme Court last week struck down much of Trump's tariff policy, prompting him to impose a new 10% duty under a different law, which he has vowed to raise to 15%.
But for countries where the European Bank for Reconstruction and Development operates, these developments will only bring "very limited" changes, chief economist Beata Javorcik told Agence France-Presse (AFP).
The EBRD was founded in 1991 to help former Soviet bloc nations embrace free-market economies, before extending its reach to the Middle East, North Africa and parts of sub-Saharan Africa.
"The impact of the U.S. tariffs for our countries of operation has been limited, much lower than anticipated," Javorcik said.
"There are some countries that potentially could gain to see lower tariffs, like Serbia, Bosnia-Herzegovina, Moldova or Tunisia, but overall the picture is unchanged," Javorcik said.
She cautioned that "we have not felt the full impact of tariffs yet," as a large share of 2025 exports reached U.S. markets before the measures took effect.
The EBRD also said that the artificial intelligence boom has boosted U.S. imports of technology-related goods, including semiconductors.
This could benefit countries in Central Europe, the Baltics, Bulgaria and Romania that export these types of products, Javorcik said.
