The World Bank has increased its 2023 economic growth prediction for Turkey from 3.2% to 4.2%.

In the Bank’s recent Economic Update Report for the Europe and Central Asia region titled “Slow Growth, Rising Risks”, Turkey’s growth forecast adjustment was highlighted. The report mentioned the resilience of consumer demand and reduced policy uncertainty as reasons for the upward revision.

It is further stated in the report that the Turkish economy is expected to grow by 3.1% next year and 3.9% in 2025. This projection is in line with the Bank’s previous predictions from June, where it foresaw a 4.3% growth in 2024 and 4.1% in 2025.

The report also positively noted the surprise increase in Turkey’s second-quarter growth to 3.8%, driven by double-digit consumption growth and robust government spending.

Indications of financial stabilization were evident, as the Central Bank of the Republic of Turkey has increased policy interest rates cumulatively by 2,150 basis points since May. This has signaled a shift towards further normalization in monetary policy. Moreover, since the recent elections, there has been a noticeable acceleration in debt and equity portfolio inflows, relieving pressure on foreign exchange reserves.

On a broader scale, the growth forecast for emerging markets and developing economies in the Europe and Central Asia region has been raised from 1.4% to 2.4% for 2023. The acceleration in growth reflects improvements in war-affected Ukraine and Central Asia, robust consumer resilience in Turkey, and better-than-expected growth in Russia due to increased public spending on military and social transfers.

Excluding Russia and Ukraine, the region’s growth this year is expected to be 3%, still weaker compared to pre-Covid-19 long-term averages.

In general, half of the countries in the Europe and Central Asia region are predicted to have slower or marginally different growth rates this year compared to 2022. For the period 2024-25, it is forecasted that the annual growth will be 2.6%, considering weak growth in the European Union – the region’s largest trading partner – and the knock-on effects of high inflation, tightening financial conditions, and the Russia-Ukraine War.

The report also mentioned that downside risks shadow the outlook for emerging markets and developing economies in the region, primarily due to the volatility in global commodity markets and rapid increases in energy prices.

In Ukraine, the economy is expected to grow by 3.5% this year, rebounding from a sharp contraction of 29.1% in 2022. In Russia, the projected growth is 1.6% in 2023, with a slowdown to 1.3% in 2024 and 0.9% in 2025.

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The positive economic outlook, robust consumer demand, and favorable government policies make Turkey an enticing destination for real estate investments. With the World Bank reinforcing confidence in Turkey’s economic growth, now is the ideal time to invest in its property market and capitalize on its burgeoning potential. Don’t miss out on this golden opportunity to benefit from Turkey’s promising real estate horizon!