The Organization for Economic Cooperation and Development (OECD) raised its economic growth forecast for Turkey for 2023 to 4.5% from 4.3% in September in its latest Economic Outlook. Paris based organisation raised its growth forecast for the Turkish economy in 2024 from 2.6% to 2.9%. The OECD expects the Turkish economy to grow by 3.2% in 2025.
The OECD expects interest rates to rise further as the Central Bank of the Republic of Turkey (CBRT) is committed to tightening monetary policy as necessary until there is a significant improvement in the inflation outlook. Tightening monetary policy and inflation are expected to weaken household consumption, while Turkey’s exports are projected to accelerate in 2025, reflecting stronger global growth.
The global economy will slow slightly next year but the risk of a hard landing has subsided despite high levels of debt and uncertainty over interest rates, the OECD said on Wednesday.
Growth in advanced economies that make up the OECD’s 38 members was seen headed for a soft landing, with the United States holding up better than expected so far.
“Our central projections are for a soft landing, but that cannot be taken for granted” OECD chief economist Clare Lombardelli said in the news conference where she outlined the report.
Global growth is set to moderate from 2.9% this year to 2.7% in 2024 before picking up in 2025 to 3% according to OECD’s latest Economic Outlook report. The world economy is projected to grow by 3% in 2025 as inflation continues to fall and real incomes strengthen.
According to the OECD’s Economic Outlook, global economic growth will be heavily dependent on Asian economies. While inflation and low growth forecasts continue to pose challenges for the global economy, global economic growth is projected to be 2.9 percent this year.
Risks to the short-term economic outlook suggest that geopolitical tensions in the Middle East and monetary policy tightening could have a bigger impact than expected.
The OECD raised its 2023 growth forecast for the US economy from 2.2% to 2.4% and its 2024 forecast from 1.3% to 1.5%, and raised its 2023 growth forecast for China from 5.1% to 5.2% and its 2024 forecast from 4.6% to 4.7%. Barring major shocks to food and energy prices, headline inflation in OECD countries is projected to fall from 7 percent this year to 5.2 percent in 2024 and 3.8 percent in 2025. According to the OECD, the current public debt-to-GDP ratio is at an all-time high and governments are facing increasing fiscal pressures for a variety of reasons, including the need to tackle climate change.