Barclays Economist Says Falling Inflation Is Making Turkey More Attractive for Investment

Barclays’ Global Head of Economic Research Christian Keller has said that Türkiye’s declining inflation trend and disciplined monetary policy are restoring investor confidence and strengthening the country’s appeal as an investment destination. Speaking at the World Economic Forum (WEF) Annual Meeting in Davos, Keller emphasized that Türkiye’s current economic trajectory is outperforming expectations despite global uncertainty.

Responding to questions on Türkiye’s economy and global developments, Keller noted that Turkish growth often delivers “upside surprises,” adding that the economy’s underlying dynamism tends to exceed market forecasts. According to Keller, this resilience has become one of Türkiye’s defining economic characteristics.

Inflation Is Falling, Confidence Is Rising

Keller highlighted that inflation in Türkiye continues to move downward and that the Central Bank of the Republic of Türkiye (CBRT) is maintaining a clear and credible disinflation strategy. He stressed that this consistency is critical for investor trust.

“We see inflation continuing to decline steadily this year,” Keller said. “The Central Bank is adjusting its policy according to this inflation path. It only changes policy rates when it sees inflation clearly falling or can confidently foresee it.”

He added that this approach prevents reactive policymaking and provides investors with predictability.

“The Central Bank is not chasing events. Investors can trust that real interest rates will remain at a certain level, and that makes the investment attractive. In my view, this plan has worked quite well.”

Capital Inflows and Strong Reserves

Keller pointed out that Türkiye is already benefiting from renewed capital inflows, while the central bank has been able to accumulate reserves without harming the country’s competitiveness.

“There is money flowing into Türkiye, the Central Bank is building reserves, and at the same time the Turkish economy does not appear to have lost its competitive edge,” he said.

He also underlined the importance of maintaining the current stability program and rebuilding long-term credibility.

“Continuing the stability program and restoring credibility are extremely important. The Central Bank is doing a good job in regaining its credibility,” Keller added.

Türkiye’s Advantage in a World of Uncertainty

Addressing rising global uncertainty, Keller described Türkiye as one of the most experienced countries in managing volatility.

“Türkiye is one of the best countries when it comes to dealing with uncertainty. It has been like this for a long time,” he said.

Keller also noted that Türkiye currently sits outside the primary focus of U.S. President Donald Trump’s negative trade agenda, unlike Europe, China, or Russia. This relative positioning, he argued, could work in Türkiye’s favor if global balances are managed carefully.

“If emerging market economies strike the right balance between different sides, many of them could emerge stronger from this period,” Keller said, adding that a potential recovery in European investment and growth would also benefit Türkiye.

Markets Focus on Trump’s Davos Speech

Keller stressed that geopolitical developments are now having a much more direct and tangible impact on the global economy.

“Geopolitics has always been interesting to talk about, but now it produces real consequences and has a concrete impact,” he said.

He described U.S. President Donald Trump’s upcoming Davos speech as a key moment for global markets, noting that Trump’s messaging is difficult to predict. Keller said he does not expect Trump to further escalate tensions over Greenland during the speech.

“He will likely talk about the U.S. domestic economy and policies aimed at boosting purchasing power,” Keller said. “Since we are in Davos, he will probably invite foreign investors and try to present a very strong picture of the U.S. economy.”

Keller characterized Trump’s strategy as consistent and transactional.

“I think his tactic is always the same: he tells investors, ‘Come and invest in the U.S. and everything will be fine; if you don’t, I will hit you with tariffs.’ It’s a classic ‘carrot and stick’ approach. He did the same thing last year when he joined Davos by video link.”

U.S. Economy: Resilient but Not Overheating

Keller pushed back against overly optimistic assessments of the U.S. economy, describing it as resilient rather than exceptionally strong.

“The U.S. economy is not as strong as President Trump claims, but it can certainly be described as resilient,” he said.

He noted that unemployment remains relatively low and that inflation has not risen as sharply as feared following tariff measures. While some slowdown in growth is possible, Keller said Barclays expects U.S. economic growth to remain above 2 percent.

Greenland Tensions and Europe’s Response

Keller also addressed rising tensions between the U.S. and Europe over Greenland and the possibility of new tariffs taking effect on February 1. He warned that European retaliation could harm exports but suggested the situation might also act as a catalyst for reform.

“All these risks would hurt European exports,” Keller said. “But the more interesting question is what Europe does beyond that. Will they pursue more unified policies? Will they integrate their markets further?”

He pointed out that significant barriers still exist in Europe’s services sector and capital markets, adding that renewed pressure could finally push long-discussed reforms forward.

“If this becomes the trigger for Europe to finally implement the reforms it has talked about for years, the process could ultimately turn into something positive for Europe,” Keller concluded.