OECD lowers Türkiye’s 2024 growth forecast to 3.2%

The Organisation for Economic Co-operation and Development (OECD) has revised its 2024 growth forecast for Türkiye, lowering it from 3.4% to 3.2%, according to its latest report released today.

The 2025 growth forecast was also adjusted downward from 3.2% to 3.1%.

Inflation outlook for Türkiye

The OECD raised its inflation forecast for Türkiye, projecting an average inflation rate of 56% for 2023, an increase of 0.5 percentage points. The inflation outlook for 2025 was also revised up by 0.2 percentage points to 29.1%.

Core inflation is expected to average 58.1% in 2024, up from the previous forecast of 57.5%, while the 2025 forecast was adjusted to 28.9%.

Tight monetary policy to continue

The report emphasized that Türkiye would need to maintain a tight monetary policy into 2025 to achieve targeted inflation levels. Despite the anticipated decline, inflation in Türkiye is expected to remain in double digits through 2024 and 2025.

Global growth forecast adjusted

While Türkiye’s growth projections have been lowered, the OECD raised its global growth forecast for 2024 from 3.1% to 3.2%, maintaining its 2025 forecast at 3.2%. However, the U.S. economy’s 2025 growth estimate was revised downward by 0.2 percentage points to 1.6%.

In the Eurozone, the OECD maintained its 2023 forecast at 0.7% but lowered its 2025 projection to 1.3%, down from 1.5%. Meanwhile, China’s growth forecast remains unchanged at 4.9% for 2024 and 4.5% for 2025.

Geopolitical and economic risks

The OECD warned of continued global risks, stating that geopolitical tensions and trade disruptions could further harm investments and increase import prices.

As labor markets cool, sharper-than-expected economic slowdowns could occur, potentially derailing the global disinflationary trend and causing market volatility.