The Turkish economy will stay resilient with growth of 3.4 percent in 2025 and 2026, rising to 4 percent in 2027, the European Commission said in a new report.
Domestic demand in the country remained robust in the first half of 2025 despite tight monetary policy, the state-owned Anadolu news agency reported, quoting the European Economic Forecast Autumn 2025.
The Turkish economy grew by 4.8 percent annually in the second quarter, as household consumption and investment rose 5 percent and 9 percent, respectively.
The economy is expected to have performed similarly in the third quarter.
Investment is likely to rise steadily as financial conditions improve. The trade and current-account deficits are expected to remain broadly stable, the report said.
Employment growth is projected to improve gradually, although unemployment is expected to stay around 9 percent between 2025 and 2027.
While the disinflation process remains a priority for the Turkish government, annual inflation in September remained high at 33.3 percent.
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The commission, the executive body of the European Union, expects annual inflation in Turkey to decline slowly over the next two years, averaging 25 percent in 2026 and 18 percent in 2027.
Turkey has navigated high geopolitical and domestic uncertainties relatively successfully, the commission said.
Internal political tensions in the spring triggered financial turmoil, but markets stabilised quickly, it added.
Foreign direct investment into Turkey reached $11.4 billion in January to September, 46 percent higher than the same period in 2024, according to a report by the International Investors Association.