Nov 29 2024: Turkey’s economy expanded by an estimated 2.6% in the third quarter of 2024, driven by slowing domestic demand and the effects of tighter economic policies, according to a Reuters poll. The full-year growth is expected to ease to 3%.
Growth had been stronger earlier in the year, with a 5.3% increase in the first quarter fueled by robust domestic demand and a minimum wage hike. However, the central bank’s aggressive monetary tightening—raising interest rates from 8.5% to 50% since June 2023 to combat inflation—has significantly slowed demand.
Economists predict that these tighter policies will continue to weigh on growth, with Q3 estimates ranging between 2% and 3.1%. For 2024, GDP is forecast to grow 3%, with predictions varying between 2.7% and 3.4%.
Despite these challenges, the government remains committed to rebalancing the economy and achieving sustainable growth, projecting 3.5% growth in 2024 and 4% in 2025. Turkey’s Statistical Institute is set to release official Q3 growth data on November 29.
