Economic growth in Türkiye is expected to firm this year, the World Bank said in its latest regional report on Tuesday, also pointing to stronger expansion next year and in 2027 compared to its June projections.
The Turkish economy is forecast to grow 3.5% this year, 3.7% in 2026 and 4.4% in 2027, the lender said. This reflected 0.4, 0.1 and 0.2 percentage point upgrades compared to the previous report, respectively.
In the report covering Europe and Central Asia (ECA), the World Bank evaluated key economic prospects, including growth, fiscal policies, inflation, jobs and car sales and new registrations across countries.
"Growth in the biggest economies, other than Russia, is strengthening. Growth in Türkiye and Poland, the second and the third largest economies in ECA, is expected to firm to 3.5% and 3.2%, respectively, underpinned by resilient services, investment and robust consumer demand," it said.
Considering other countries and regions, the bank projected the growth in the Western Balkans to ease this year to 3% from 3.5% in 2024, citing political uncertainty in some countries.
Moreover, it said that growth in Ukraine is projected to weaken. "The economic expansion in Ukraine is likely to slow to 2% in 2025 from 2.9% in 2024 as Russia’s prolonged invasion affects investment and business activity," it added.
The bank also pointed out that expansion in Türkiye is turning out to be more "broad-based" and that it would rebound due to looser monetary policy and lower inflation.
"Growth is expected to recover in Türkiye. Growth is set to strengthen to 3.7% next year and 4.4% in 2027 as monetary policy loosens and inflation continues to moderate," the bank suggested.
"With investment recovering alongside resilient consumption, the expansion in Türkiye is becoming more broad-based, signaling a shift toward a more durable and sustainable trajectory," it added.
On the central bank's expected trajectory, the World Bank said it sees it likely maintaining "a restrictive policy stance to anchor inflation expectations."
Furthermore, on dynamics in the automotive sector, the bank said that the region "is rapidly shifting toward cleaner vehicles."
"In Romania, for example, new registrations of hybrids and plug-in hybrids rose substantially despite a steep drop in overall registrations. In Türkiye, hybrid and electric vehicles now account for nearly 45% of all registrations, up from about 22% a year ago," it noted.
