Turkish economy gears up for expansion as US growth set to shrink: OECD

The Organisation for Economic Co-operation and Development (OECD) has lowered its global economic growth forecasts, expecting a slowdown in the U.S., while raising its outlook for the Turkish economy in its latest economic report released on Monday.

According to the Economic Outlook, Interim Report March 2025, titled “Steering through uncertainty,” the OECD estimates that Türkiye’s economy grew by 3.2% in 2024. The organization previously projected a 2.6% growth rate for the year but has now revised it to 3.1%. It also forecasts that Türkiye’s economy will expand by 3.9% in 2026.

The OECD expects Türkiye’s annual inflation rate to reach 31.4% by the end of 2024 and decline to 17.1% by 2026.

US growth to slow in 2026

The organization has also revised its global economic growth forecast for this year, lowering it by 0.1 percentage points to 3.1%. It projects that global growth will further ease to 3% by 2026.

In the United States, economic growth is expected to slow from 2.8% in 2024 to 2.2% in 2025 and 1.6% in 2026. Meanwhile, the Eurozone is projected to expand by 0.7% in 2024, 1% in 2025, and 1.2% in 2026.

The OECD forecasts China’s economy to grow 5% in 2024, before moderating to 4.8% in 2025 and 4.4% by 2026.

Key findings in the report

The OECD report highlights several major risks and economic trends:

• Inflation remains a concern: Headline inflation has risen in several economies, and while it is expected to ease, it will likely stay elevated for longer than initially forecast.
• Geopolitical and policy uncertainty: The report warns that rising trade barriers and policy uncertainty could negatively impact investment and household spending.
• Risk of escalating trade restrictions: The OECD cautions that further trade conflicts and retaliatory measures could weigh on global economic prospects.
• Fiscal and monetary policies: The report emphasizes that central banks must remain vigilant in managing inflationary pressures, while governments should take decisive fiscal actions to ensure debt sustainability.
• The need for international cooperation: It stresses the importance of collaboration among nations to prevent trade tensions from escalating into a broader economic downturn.

OECD Secretary-General Mathias Cormann, commenting on the findings in his X post, stated that while global economic growth remains stable, inflationary pressures persist.

Although inflation is projected to decline, it is likely to remain higher than previously anticipated through 2025 and 2026, he noted.