Positive Assessment of the Turkish Economy from the IMF

IMF's Latest Assessments on the Turkish Economy

The International Monetary Fund (IMF) shared preliminary findings from its visit to Turkey under the Article IV consultation. These assessments offer important insights into Turkey's growth and inflation targets.

Economic Achievements and Inflation Decline

In its statement, the IMF noted that the commitment of Turkish officials to sustain growth and reduce inflation has led to significant achievements, such as gradual inflation reduction, increased confidence in the lira, and strengthened reserves.

Risks and Monetary Policy

The report indicated that while growth remains solid, risks continue to be high. The role of the strong policies implemented by the Central Bank of the Republic of Turkey (CBRT) was emphasized. Keeping real interest rates high and controlling financial risks are key elements in this process.

Policies for Economic Stability

The statement expressed that to achieve a more stable and sustainable economy, priority should be given to revenue-focused tightening of fiscal policies, tighter monetary policy, and prudent income policies. This combination of policies may slow growth in the short term, but can be balanced with structural reforms and social protection measures.

Growth Expectations

The Turkish economy is expected to grow by 3.5 percent in 2023, while a less stringent fiscal stance in 2026 is projected to raise growth to 3.7 percent. The IMF also stated that inflation will reach 33 percent by the end of 2025, with moderate wage increases helping to reduce inflation.

Policy Recommendations

It was emphasized that additional policy efforts are necessary for aligning inflation with CBRT targets, and the importance of revenue-raising measures and spending cuts to overcome existing challenges was highlighted.

Market Risk and Financial Sector

While the financial sector continues to show a healthy outlook, attention was drawn to monitoring foreign exchange liquidity risks. Officials need to continue making progress in strengthening regulatory frameworks.