Türkiye’s macroeconomic policies of the last two years have achieved a significant reduction of its current account deficit and a decline in inflation. To ensure strong and sustainable growth, Türkiye should maintain credible and prudent monetary and fiscal policies, while implementing far-reaching structural reforms to boost its productivity, according to a new OECD report.
The latest OECD Economic Survey of Türkiye says that GDP growth is forecast at 3.1% in 2025 and 3.9% in 2026. Inflation will continue declining to reach 17% in 2026.
“Maintaining tight monetary policy and fiscal discipline will be key to ensure sustainable economic convergence with other OECD countries and a continued decline in inflation towards the 5% target,” OECD Secretary-General Mathias Cormann said, presenting the Survey in Istanbul alongside Türkiye’s Minister of Treasury and Finance Mehmet Şimşek. “Strengthening fiscal discipline will require structural reforms to improve spending efficiency and optimise tax revenues.”
The Turkish economy is very dynamic, but business dynamism could be boosted further by reducing the administrative burden on firms. The conduct of professional services activities is among the most regulated in the OECD and hampers productivity along the value chain. Easing restrictions and regulations in services, including limits to foreign participation, would promote business dynamism, services exports and foreign direct investment.
Potential growth per worker in Türkiye has been slowing. The Turkish economy remains specialised in medium-technology sectors and needs to boost competitiveness in high-skilled manufacturing and services. Upward integration in global value chains will require better diffusion of innovation and workforce upskilling to enable companies to gain a competitive edge in international markets.
The economy would also benefit from higher employment rates, notably of women. Female labour force participation remains significantly lower than in other OECD countries. Expanding pre-school education facilities, stepping up child benefits, and reducing effective tax rates for parents would boost women’s participation. Lowering social security contributions on low-income workers would also raise labour market participation and reduce informality.
Greenhouse gas emissions are relatively low but growing fast. Current policies are insufficient to reach the government’s 2053 target of zero net emissions. Reducing emissions will require higher effective pricing of greenhouse gas emissions and transitioning away from coal for energy supply. Climate change adaptation policies should also expand to address risks created by rising temperatures, for example high costs from wildfires.
See an Overview of the Economic Survey of Türkiye with key findings and charts (this link can be used in media articles).
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