Turkey's economic growth has exceeded all forecasts

The Turkish economy grew by 3% year-on-year in the fourth quarter of 2024, and in general, last year's growth was 3.2%, exceeding all expert forecasts and despite high interest rates. This is evidenced by data published by the National Institute of Statistics of Turkey, as reported by Reuters.

The Turkish government, which initially forecast growth of 3.5% in 2024, has downgraded its forecasts amid adjustments to domestic demand and efforts to slow inflation.

Balanced economic growth was recorded last year, with the contribution of domestic demand amounting to 2.1 points, and net external demand - 1.1 points.

"More favorable financial conditions, a decrease in inflation, an increase in the predictability of our policy and a strengthening of confidence have a positive impact on economic activity," said Finance Minister Mehmet Shimshek.

The official warned that favorable economic indicators among Turkey's trading partners, improved global financial conditions and moderate expectations regarding commodity prices will contribute to economic growth in 2025. At the same time, the strengthening of protectionist policies in world trade and geopolitical events are among the risk factors.

Analysts polled by Reuters had expected Turkey's GDP to grow by 2.6% in the fourth quarter of 2024 and by 3% for the whole of last year. According to their forecasts, the Turkish economy will grow by 3.1% in 2025, which is well below the 5.1% level in 2023, reflecting the effect of an interest rate increase.