World Bank Boosts Turkiye's 2025 Growth Forecast while Global Economy Falters
Enhanced economic growth prediction for Turkey in 2025, set at 3.1% by the World Bank.
Turkiye's economic growth story is gaining traction, with the World Bank revising its 2025 growth forecast for the country from 2.6% to a robust 3.1%. This significant uptick comes partly due to stronger-than-expected growth in the final quarter of 2024 and lower global oil prices, as the Finance Minister Mehmet Şimşek proudly announced on his X account.
However, a slight reduction in the 2026 forecast from 3.8% to 3.6% has been made. The World Bank anticipates that Turkiye's growth will reach 4.2% by 2027.
Turkiye isn't alone in this improved fortuna; Argentina sees a similar upward revision in the bank's 2025 forecasts. Yet, on a disappointing note, the World Bank has cut its 2025 global growth forecast from 2.7% to 2.3%, depicting the weakest global economy in 17 years.
The World Bank's report warns of potential average global growth of 2.5% in the first seven years of the 2020s, marking the weakest decade since the 1960s. Factors such as trade tensions and policy uncertainties are identified as the primary culprits.
Economic experts from various regional blocs aren't much more optimistic. The Paris-based Organisation for Economic Co-operation and Development also slashed its 2025 global growth forecast from 3.1% to 2.9%. This announcement comes after the International Monetary Fund in April cut its world growth expectations for this year, citing Trump's tariffs as a major cause.
As Turkiye leaps ahead, here's a regional breakdown of the World Bank's growth outlook:
- East Asia and Pacific: While growth is expected to slow to 2.4% in 2025, it is predicted to rebound to 2.6% in 2026-27.
- Europe and Central Asia: Growth is projected to remain steady at 2.3% in 2025, averaging 2.5% in 2026-27.
- Latin America and the Caribbean: Growth is expected to rise to 2.7% in 2025 and further strengthen to an average of 3.9% in 2026-27.
- Middle East and North Africa: Growth is projected to moderate to 5.8% in 2025 and firm to an average of 6.2% in 2026-27.
- South Asia: Growth is expected to edge up to 3.7% in 2025 and average 4.2% in 2026-27.
- Sub-Saharan Africa: Despite growth projections being available, they will not be detailed here.
While Turkiye's upward revision in growth forecasts is promising, the global economic outlook remains murky due to continuous trade tensions and policy uncertainties.
Turkiye's finance sector might benefit from the country's revised growth forecast, as a stronger economy can contribute to increased business activity and investment. However, the global economy's weakest performance in 17 years, as noted by the World Bank, suggests potential challenges for international businesses.
