World Bank predicts inflation peak, economic growth in Türkiye
Türkiye’s inflation is expected to peak in May 2024 and then see a gradual decrease, while the country’s economy is projected to grow by 3% this year, 3.6% next year
The World Bank recently released a significant forecast concerning Türkiye’s economic prospects, indicating a peak in inflation by May 2024, followed by a gradual decline.
The bank’s latest report on European and Central Asian economies highlights a challenging global backdrop.
Slower growth is expected across emerging markets in the region due to various economic pressures, including geopolitical tensions and the ongoing impacts of the pandemic.
According to the World Bank, Türkiye is expected to see an economic growth rate of 3% this year and 3.6% in the following year. These figures represent a slight adjustment from the January predictions of 3.1% and 3.9%, respectively.
The bank attributes this growth to strict monetary policies currently in place which are anticipated to ease inflationary pressures after reaching a projected peak in May.
“In light of tight monetary policy, inflation is expected to peak in May and then decline gradually,” the World Bank stated in its report.
The report also projected a significant improvement in Türkiye’s current account balance starting in 2024, bolstered by an increased contribution from net exports.
The World Bank highlighted several risk factors that could potentially alter these forecasts, including the pace of recovery in major trading partners like the Eurozone, ongoing geopolitical developments, and restrictive monetary policies across the region.
The bank also noted that the new economic administration in Türkiye might enhance the country’s investment climate, potentially leading to more stability in the Turkish currency and accelerating economic reforms.
As for the regional outlook, the economies of Europe and Central Asia grew by 3.3% last year but are expected to slow down to 2.8% this year, with a further slight decrease to 2.7% anticipated in 2025.
The report emphasizes that the ongoing war in Ukraine and other shocks, such as the cost-of-living crisis initiated in 2022, continue to impede recovery, though Central Asia shows signs of a robust rebound.
Furthermore, the report details a significant reduction in inflation across emerging markets and developing economies in Europe and Central Asia, largely due to decreasing global energy and food prices.
From a high of 15% at the start of 2023, the average annual inflation rate in these regions dropped to 4.2% by February 2024.
Source: Newsroom
