The European Bank for Reconstruction and Development (EBRD) has kept its 2025 economic growth forecast for Turkey unchanged at 3%. However, the bank announced its 2026 growth expectation at 3.5%. The EBRD released its Regional Economic Prospects report covering the countries it operates in. The bank revised its regional economic growth forecast down by 0.3% to 3.2%. Weak external demand, the impact of conflicts, and a sluggish reform momentum in these countries were cited as key factors for the decrease. For Turkey, the growth projection for this year remains at 3%. The report highlights that tight monetary and fiscal policies led to a significant drop in inflation and an improvement in the country’s external position. Net exports increased, and the current account deficit exhibited a stable decline. However, the EBRD warned against premature policy easing due to concerns about persistently high inflation, geopolitical uncertainties, and the risk that the real appreciation of the Turkish Lira could impact export competitiveness negatively. The bank predicted that the Turkish economy would grow by 3.5% in 2026. EBRD’s Chief Economist for the Region, Rafik Selim, stated that the slowdown would be more noticeable in 2025, with momentum in growth gaining traction from 2026 onwards.