The World Bank raised its growth expectations for the Turkish economy

The World Bank has raised its growth expectations for the Turkish economy

The World Bank has released the June edition of its Global Economic Prospects report.

According to the report, it is expected that the Turkish economy will grow by 3.2% this year, 4.3% next year, and 4.1% in 2025.

In its January projections, the World Bank had forecasted a growth rate of 2.7% for the Turkish economy in 2023 and 4% in 2024.

The report highlights that the Turkish economy remained resilient in the first quarter of 2023, despite being hit by two major earthquakes in early February. The direct losses from these earthquakes are estimated to be around 4% of the country’s 2021 GDP, with recovery and reconstruction costs potentially being twice as high. The report states that reconstruction efforts are expected to support investment.

The report notes the uncertainty in the development of macroeconomic policies given the high inflation environment and highlights significant challenges such as depreciation of the exchange rate, high current account deficit, and low net foreign exchange reserves.

Despite these headwinds, the report emphasizes that Turkey continues to make a significant contribution to the growth of the Europe and Central Asia region and highlights the resilience of its economy in the first quarter of 2023.

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