Türkiye eyes economic turnaround by 2026

OECD sees recovery path if tight monetary policies continue, credits Türkiye’s return to orthodoxy for cooling inflation, improving reserves, and restoring investor confidence

ISTANBUL, Türkiye (MNTV) — Türkiye’s economy could be back on a sustainable growth path by 2026 if the government maintains its current policy course, according to a new report by the Organisation for Economic Co-operation and Development (OECD).

The report highlights improving inflation numbers, growing foreign reserves, and cautious investor optimism as signs of a stabilising economy after years of unorthodox policymaking.

Since mid-2023, Türkiye has taken a sharp turn towards more conventional economic policies, focusing on tight monetary controls to combat persistent inflation. 

“If this trajectory continues, Türkiye could be on track for stable and sustained growth by next year,” said Sébastien Turban, the OECD’s lead economist for Türkiye.

Inflation, once at a staggering 75% last May, has now slowed to 38.1% as of March 2025 — the lowest in over a year.

The OECD expects inflation to fall further to 31.4% by the end of this year and to 17% by 2026. While still high, the downward trend is clear.

The Turkish central bank’s own forecast for year-end inflation is even more optimistic, at 24%.

Turban credited the country’s new direction for these improvements, saying the central bank and fiscal authorities appear committed to seeing through the tough measures.

“We see that tight monetary policy will be maintained until inflation is under control,” he said, cautioning against any premature easing of interest rates.

Türkiye’s central bank has already made calculated adjustments, cutting the policy rate to 42.5% over recent months after previously hiking it by over 4,000 basis points. The aim has been to cool inflation without derailing growth entirely.

One major shift has been the rebound in foreign exchange reserves, which turned positive for the first time since 2020. Despite some drawdowns due to market volatility, the OECD sees the overall reserve buildup as a healthy sign of improved external stability.

“Before these policy adjustments, Türkiye’s growth was running at unsustainable levels,” Turban noted.

“Now, with fiscal and monetary discipline, the country is aligning closer to its true economic potential.”

The OECD forecasts Türkiye’s GDP growth at 3.1% in 2025 and 3.9% in 2026 — close to its estimated potential of 4%.

That means the economy could grow without igniting fresh inflationary pressures, something the country has struggled with in the past.

But the recovery isn’t just about numbers. Investor sentiment is also showing signs of revival.

Credit rating upgrades and renewed interest from global markets reflect growing confidence. 

Still, Turban warned that Türkiye needs to attract more long-term foreign direct investment, not just short-term speculative capital.

“Permanent investment is key. That’s why maintaining policy stability is crucial,” he stressed.

Ultimately, the OECD’s message is clear: stay the course.

“Türkiye’s current macroeconomic approach is producing results,” said Turban.

“If these policies are preserved and implemented with consistency, the economy has a real chance to recover fully and sustainably.”

The OECD’s Economic Survey of Türkiye, released Friday, paints a cautious but hopeful picture — one where discipline and patience could finally pay off for a country long accustomed to economic swings.