The German credit rating agency Scope Ratings predicts that Turkey will return to 3.3% growth next year after expanding by 4.1% this year.
In Scope’s “Outlook Report” for 2024, it was noted that Turkey has continued to normalize its monetary policy since the general election, increasing the policy rate by 3,150 basis points and simplifying macro-prudential measures. Scope commented, “However, there is uncertainty about the duration of this normalization process ahead of the municipal elections planned for March 2024. Nevertheless, tighter funding conditions slow credit growth and domestic consumption while the weak lira supports net exports.”
The institution predicted that with the economy adapting to the global crisis, growth would be 3.3% in 2024, and with more restrictive and robust policies supporting investor confidence, it would reach 3.8% in 2025.
It is expected that inflation will continue to rise in the first half of 2024 due to the depreciation of the lira and tax increases, with average inflation increasing from 55% this year to 60% in 2024.
The report stated, “However, monetary tightening and economic slowdown may help control the rise in domestic prices in the second half of next year. If policy normalization continues, inflation could fall to 25% by 2025.”