In the short term, Turkey’s economy is expected to maintain strong growth rates and continue to gradually reduce inflation, according to the International Monetary Fund (IMF), which published preliminary findings from its staff visit to Turkey as part of the Article IV consultations.
The IMF report notes that the Turkish authorities’ desire to maintain economic growth while reducing inflation has brought significant results, including a gradual decline in inflation, strengthening confidence in the lira and growing reserves. Economic growth remains resilient, and risks, while still high, have decreased compared to last year, the IMF noted.
The report highlights that the Central Bank of the Republic of Turkey has used various tools to keep real interest rates high and control financial risks, and the reduction in the fiscal deficit this year has helped contain inflation.
The Fund notes that towards a more sustainable economic trajectory, priority should be given to tightening fiscal policy through higher revenues, more stringent monetary policy and prudent income policy.
The IMF believes that such a set of measures could slow short-term growth, but additional structural reforms, including measures to strengthen competition, market institutions for labor and goods, and protection of the most vulnerable groups of the population, could offset these effects, increasing Turkey’s growth potential and making it more inclusive.
The Fund also highlighted indicators such as a reduction in the budget deficit, lower inflation, positive real interest rates, confidence in lira, economic growth, current account deficit and improvement in reserves. “Prudent economic policies have led to significant gains,” it said.
It notes that “GDP growth is expected to remain resilient in the short term and inflation is expected to continue to decline gradually.”
Turkey’s economy is expected to grow by 3.5% this year, with lower interest rates and a looser fiscal stance in 2026 supporting demand, leading to higher investment and consumption boosting growth. 3.7%.
The IMF predicts that by the end of 2025 inflation will drop to 33%.