Turkey’s economy is expected to have grown by 4.1% in the second quarter and to grow by 2.9% for 2025 as a whole, well lower than government forecasts, a Reuters poll showed on Friday.
The big emerging market economy expanded by 2% in the first quarter and 3.2% in 2024 a whole. The lower full-year growth estimate reflects the effects of monetary tightening that began in mid-2023 and has only started to ease a bit this year.
The government forecasts 4% growth this year. In December, the central bank started cutting after having kept the main policy rate steady for eight months. Inflation has dipped to 33% from as high as 75% last May.
In March and April, the bank reversed course and tightened by 350 basis points and raised the lending rate to 49% in response to market turmoil over the arrest of Istanbul Mayor Ekrem Imamoglu, President Recep Tayyip Erdogan’s main political rival. [Reuters]