The European Commission said Monday that Türkiye’s economy is set to remain robust, projecting 3.4% growth this year and in 2026, with an uptick to 4% expected in 2027.
"Despite a tight monetary policy stance, domestic demand remained robust in the first half of 2025," the commission said in its European Economic Forecast Autumn 2025 report.
It stated that Türkiye's economic growth was 4.8% annually in the second quarter and that household consumption and investment growth were 5.1% and 8.8% annually, respectively, and economic performance is expected to remain largely unchanged in the third quarter.
By the end of this year, growth is expected to slow to 3.4%, before remaining resilient next year, and rising to 4% in 2027, with household consumption expected to be the main driver of growth, supported by wealth effects driven by high gold prices and continuing employment gains, according to the report.
It said investments are expected to increase steadily in Türkiye as financial conditions and the economic outlook improve, while the trade and current account deficits are projected to remain generally stable.
Employment growth is projected to gradually accelerate, with unemployment remaining largely unchanged at 8.6% between 2025 and 2027.
The report said the disinflation process remains a priority for Turkish policymakers, with annual inflation in September still coming in at elevated levels, "surprisingly" rising to 33.3%.
A rise in food prices due to the negative impact of weather on agricultural production, the resilient course of service inflation, and the rise in gold prices all put upward pressure on inflation, and in this environment, the fight against inflation is supported by a tight monetary policy stance, according to the report.
The commission said it expects annual inflation come down "only slowly" in the next two years, on average at 24.8% in 2026 and 17.7% in 2027.
"The Turkish economy has navigated the high geopolitical and domestic uncertainties of recent years relatively successfully," the commission said, adding that "internal political tensions" in the spring triggered financial turmoil, but markets stabilized relatively quickly.
Stating that the political situation remains volatile and that risks, both domestic and external, are high, the report emphasized that recent track record of "sound" policies, lower economic imbalances, and higher buffers might help Türkiye withstand these challenges if the orthodox economic policy stance is "firmly" maintained.
Meanwhile, for the whole EU economy, the report stated that while economic growth was above expectations this January-September, it was estimated that it would be 1.4% for the entire year and in 2026, before rising to 1.7% in 2027.
