22.11.2025 07:40
The International Monetary Fund (IMF) announced that Turkey's economic policies have yielded successful results and that it expects growth and inflation to continue to gradually decrease in the short term. The IMF also anticipates that the inflation rate will be 33% by the end of 2025.
The International Monetary Fund (IMF) reported that Turkey's economy is expected to maintain solid growth in the short term and that inflation is expected to continue to gradually decrease.
GRADUAL DECREASE IN INFLATION IS FORECASTED
The Fund shared preliminary findings obtained at the end of the IMF staff's visit to the country under the Article IV consultation. In a statement from the IMF, it was noted that the commitment of the authorities to reduce inflation while maintaining growth has brought significant achievements, including the gradual decrease in inflation, increased confidence in the lira, and strengthened reserves.
RISKS HAVE DECREASED COMPARED TO LAST YEAR
In the statement, it was mentioned that while growth remains solid, risks are still high but have decreased compared to last year. It was emphasized that strong policies play a key role, with the Central Bank of the Republic of Turkey (CBRT) using various tools to keep real interest rates high and control financial risks, while the decrease in the budget deficit this year has helped to rein in inflation.
The statement indicated that the slow pace of disinflation has prolonged the period during which the economy is vulnerable to shocks arising from investor behavior, global risk appetite, or energy prices, and that this delay brings concrete costs and risks to stability.
RECOMMENDATIONS WERE LISTED
While moving towards a more stable and sustainable path, the statement noted that priority should be given to tightening fiscal policies focused on revenue, a tighter monetary policy, and prudent income policies. It was stated that this policy mix could slow short-term growth, and that complementary structural reforms aimed at increasing competitiveness and inclusivity, such as legal frameworks for labor and product markets, as well as measures to protect the most vulnerable segments, could help balance these effects, enhance Turkey's growth potential, and make growth more inclusive.
"PRUDENT ECONOMIC POLICIES HAVE ACHIEVED SIGNIFICANT SUCCESSES"
The statement pointed to indicators such as the decrease in the budget deficit, the drop in inflation, positive real interest rates, confidence in the lira, growth, the current account deficit, and improvements in reserves, stating, "Prudent economic policies have achieved significant successes."
In the IMF's statement, it was noted, "In the short term, Gross Domestic Product (GDP) growth is expected to remain solid and inflation is expected to continue to gradually decrease."
3.5% GROWTH IS EXPECTED THIS YEAR
The statement indicated that the country's economy is expected to grow by 3.5% this year, noting that falling policy interest rates and a less tight fiscal stance will support demand in 2026, resulting in increased investment and consumption that will raise growth to 3.7%.
INFLATION ESTIMATE IS 33%
The statement mentioned that inflation at the end of 2025 is expected to be 33%, and looking ahead, it was stated that the decreasing inertia, along with moderate wage increases and falling inflation, will gradually reduce inflation. The Fund emphasized that additional policy efforts are needed to align inflation with CBRT targets and to increase resilience against shocks.
The statement noted that this year's fiscal consolidation should be maintained to accelerate disinflation and reduce risks, highlighting the importance of revenue-enhancing measures and spending cuts.
The statement indicated that Turkey's monetary policy framework has achieved significant successes, but it also noted that the current environment is challenging and that the use of multiple tools has complicated the CBRT's communication and the formation of inflation expectations.
In the IMF's statement, it was noted that achieving the CBRT's inflation targets requires higher real interest rates supported by a framework that firmly focuses on the policy interest rate. The statement emphasized that the exchange rate policy should focus on softening excessive volatility that could disrupt inflation expectations.
The statement noted that the financial sector continues to remain healthy and that the authorities have demonstrated the ability to act quickly and decisively in the event of market stress. It was expressed that while overall risks are lower, foreign exchange liquidity risks need to be monitored, and that authorities should continue to build on the recent progress made to strengthen their supervisory frameworks.