Fitch Ratings has raised its growth forecast for Türkiye for this year and has revised its global economic growth forecast from 2.4% to 2.5% but reduced its forecast for the following year from 2.1% to 1.9%.

The global rating agency said in a report released Wednesday that the upward revision of the global economic growth forecast for this year, from 2.4% to 2.5%, reflects the "surprising resilience" in emerging markets outside the United States, Japan and China so far this year.

Türkiye's economic growth forecast for this year has been increased from 2.5% to 4.3% following stronger-than-expected growth in the second quarter, the agency said in its Global Economic Outlook September 2023 report.

Data last month showed Türkiye's economy grew by a more-than-expected 3.8% in the second quarter, following the revised growth of 3.9% in the first quarter.

The report highlighted strong increases in consumption, investment and spending, contributing to a quarterly growth rate of 3.5%, well above Fitch's previous estimate of 0.6%.

According to the report, Türkiye's economy is expected to grow by 3% in 2024 and 3.4% in 2025, thanks to the continued strength of retail sales and increased domestic credit growth.

It also mentioned that government spending on reconstruction projects following earthquakes is expected to continue supporting the economy.

Global growth expectations

According to the report, while slightly faster global economic growth than previously expected is anticipated for this year, deepening troubles in China's property market have cast a shadow on global growth expectations.

In the report, it was stated that the economic growth forecast for China has been lowered from 5.6% to 4.8% for this year and from 4.8% to 4.6% for the following year.

Monetary tightening also exerts increasing pressure on demand prospects in the U.S. and Europe.

The report stated that this year's growth forecast for the U.S. economy has been raised from 1.2% to 2%, while the growth expectation for the next year has been lowered by 0.2 points from 0.5% to 0.3%.

Growth forecasts for the eurozone have been revised downwards, with Fitch citing a halt in the recovery following an energy shock and new external challenges arising from slowing global trade and China.

It was noted that the European Central Bank's (ECB) tightening puts pressure on credit growth.

The report indicated that this year's growth expectation for the eurozone economy has been lowered from 0.8% to 0.6%, and for the next year, it has been reduced from 1.4% to 1.1%.