The OECD has published new projections for Turkey’s interest rates, inflation, economic growth and unemployment. The latest Economic Outlook report, titled “Resilient Growth but Rising Vulnerabilities”, includes updated forecasts reflecting both progress and ongoing risks for the Turkish economy.
Inflation Outlook Revised Upward
The OECD raised its headline inflation expectations for Turkey. For 2025, the projection has increased from 33.5% to 34.5%. The 2026 estimate was also revised from 19.2% to 20.8%. For 2027, the OECD expects inflation to ease more significantly, falling to 11.7%.
According to the report, inflation is expected to continue declining, but the OECD underlines that tight monetary policy must be maintained until price stability is firmly restored.
Interest Rate Projections: Gradual Cuts Ahead
As the Central Bank of Turkey (CBRT) begins reducing interest rates, monetary policy is expected to become more supportive by the third quarter of 2025. The OECD believes easing inflation in 2026 and 2027 may allow room for additional rate cuts.
The CBRT’s policy rate is expected to decline from the current 40.5% to 25% by the end of 2026, and further to 17% by the end of 2027. Despite the cuts, the OECD notes that real interest rates will remain positive, ensuring continued policy tightness.
Growth Forecast Strengthened
The Turkish economy, which grew 3.3% in 2024, is projected to expand by 3.6% in 2025, 3.4% in 2026 and accelerate to 4% in 2027.
The OECD upgraded its 2025 and 2026 growth expectations compared with its previous interim report, citing improved financial conditions expected to boost household consumption and investment over the next two years. The economic impact of U.S. tariff hikes on Turkish exports is expected to be mild and short-lived.
Budget, Employment and External Balance
Turkey’s budget deficit, estimated at 3.1% this year, is expected to narrow to 2.8% by 2027, supported by efforts to expand the tax base and reduce informality.
The current account deficit is forecast to remain manageable, at 3.3% in 2026 and 3.4% in 2027.
Unemployment is projected to hover around 8.4% in 2025 and 2026, then edge down to 8.1% in 2027. The OECD stresses that policy consistency and regulatory predictability will remain vital for investor confidence and attracting foreign capital.
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