Turkey: Growth resilience and inflation risks – ING

ING’s Muhammet Mercan projects Turkey’s 4Q25 GDP growth at 3.9%, implying 3.8% for 2025, underpinned by domestic demand but with some quarterly loss of momentum. He expects February inflation to remain high at 2.9% month-on-month and 31.4% year-on-year, warning that a more negative surprise could prompt the central bank to pause tightening at the March MPC meeting.

Domestic demand strength versus sticky prices

"We expect growth at 3.9%, translating into 3.8% growth for the entire 2025."

"This implies continuing resilience in GDP amid domestic demand–driven growth, though some loss of momentum is likely on a quarterly basis."

"Inflation, on the other hand, should remain high in February, as warned by the central bank, with upward pressure from food prices ahead of Ramadan."

"We see the monthly figure at 2.9%, with annual inflation inching up to 31.4% from 30.7% a month ago."

"A more negative surprise would lead the Bank to be more cautious and hence possibly pause at the March MPC meeting, in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)