Turkey GDP: Growth trends and economic forecasts for 2025

Source:Middle East News Date:11Nov2024

An excellent primer for Turkey novices

Economic challenges

Despite its robust growth, Turkey’s economy faces several significant challenges. High inflation remains a persistent issue, with rates averaging around 10 percent per annum in recent years. This high inflation has eroded purchasing power and created economic uncertainty. Additionally, productivity growth has been relatively low. That is averaging around 2 percent per annum, which hampers long-term economic potential.

The fiscal deficit is another major challenge. That is standing at around 3 percent of GDP. This is higher than the EU average. Currently, at approximately 50 percent of GDP, public debt exceeds the EU average, raising concerns about fiscal sustainability. The banking sector faces its own issues, including high levels of non-performing loans and low profitability, which threaten financial stability.