EBRD cuts Türkiye 2026 growth forecast as domestic demand weakens

Traders Union
All News
Financial Institutions
EBRD cuts Türkiye 2026 growth

Highlights

The EBRD cut Türkiye’s 2026 GDP growth forecast to 3.0 percent from 3.5 percent amid weaker domestic demand and persistent high inflation.
Aggregate growth across EBRD regions is now projected at 2.5 percent for 2026, revised down by 0.6 percentage points since June due to tighter financing and geopolitical challenges.
The EBRD warns further Middle East conflict could raise energy prices, reduce tourism and investment, and exacerbate risks for lira depreciation and corporate balance sheets.

Revised outlook in latest regional report

As reported by European Bank for Reconstruction and Development, Türkiye’s economy is expected to grow by 3.0 per cent in 2026, down from the 3.5 per cent forecast published in June 2026. The bank says growth is then projected to accelerate to 4.0 per cent in 2027, according to its latest Regional Economic Prospects report published today.

The downgrade reflects weaker domestic demand amid high inflation and tight financial conditions. The report also cites the continuing impact of the conflict in the Middle East and cost competitiveness pressures on exports.

The EBRD says a further escalation of hostilities in the Middle East could increase pressure on energy prices, cut tourism revenues, trigger capital outflows and disrupt trade. It adds that rising foreign-exchange liabilities leave corporate balance sheets exposed to lira depreciation.

Regional pressures and upside risks

Across the EBRD regions, aggregate growth is projected at 2.5 per cent in 2026 before accelerating to 4.0 per cent in 2027. The bank has revised its 2026 regional forecast down by 0.6 percentage points since June, citing tighter financing conditions, drought across parts of Europe and the Black Sea blockade linked to Russia’s continuing invasion of Ukraine.

For Türkiye, the bank says a lasting peace in the Middle East, stronger external demand and continued policy discipline could support investment and faster growth. The EBRD remains one of the country’s key investors, with more than 25 billion euros invested in Türkiye, largely in the private sector.

In our earlier report on HSBC relocating a planned board meeting from Dubai to London, we highlighted how ongoing Middle East security tensions were still influencing corporate travel and operational decisions for multinationals in the Gulf. We also noted that despite the region’s importance to HSBC’s growth strategy, firms were maintaining tighter travel limits and weighing the broader business impact of elevated geopolitical risk.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.