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Add to Preferred SourcesThe European Bank for Reconstruction and Development (EBRD) has revised its 2026 growth forecast for Türkiye downward to 3.0 per cent from the 3.5 per cent projected in June 2026, according to a press release. The Bank expects the country’s economy to accelerate to 4.0 per cent growth in 2027. The updated projections were published in the EBRD’s latest Regional Economic Prospects (REP) report on 24 September 2026. Weaker domestic demand and continued regional tensions have weighed on the outlook. The revision reflects a broader reassessment of conditions across the EBRD regions.
Türkiye remains one of the EBRD’s principal areas of engagement, with more than €25 billion invested in the country, largely in the private sector. The country’s economic performance has been shaped by high inflation and tight financial conditions. External factors, including the ongoing conflict in the Middle East, continue to influence the outlook. Cost competitiveness pressures have affected the export sector. These combined dynamics informed the Bank’s revised assessment.
According to the REP, the downward revision reflects weaker domestic demand amid high inflation and tight financial conditions, as well as the continuing impact of the conflict in the Middle East and cost competitiveness pressures on exports. An escalation of hostilities in the Middle East could put further pressure on energy prices. Such an escalation could also reduce tourism revenues, trigger capital outflows and disrupt trade. Growing foreign-exchange liabilities expose corporate balance sheets to lira depreciation. These downside risks remain central to the near-term outlook.
On the upside, a lasting peace in the Middle East, stronger external demand and continued policy discipline could support investment and faster growth. Aggregate growth across the EBRD regions is projected at 2.5 per cent in 2026 before accelerating to 4.0 per cent in 2027. The 2026 regional forecast has been revised down by 0.6 percentage points since June. This regional revision reflects tighter financing conditions and the impact of drought across parts of Europe. It also reflects the Black Sea blockade related to Russia’s continued invasion of Ukraine.
The revised forecasts place Türkiye’s trajectory within a broader regional slowdown expected to reverse in 2027. Domestic demand weakness and regional tensions remain the central factors shaping the outlook. The EBRD continues to identify both downside risks and potential upside drivers for the Turkish economy. Its sustained investment presence underscores the country’s importance to the Bank’s operations. The 2027 rebound to 4.0 per cent remains the anchor of the Bank’s medium-term projection.