OECD lowered Türkiye's growth forecast, raised inflation expectations

The Organization for Economic Co-operation and Development (OECD) updated its growth and inflation forecasts for the Turkish economy in its September Economic Outlook report published today.

The organization reduced the growth forecast of the Turkish economy for 2026 from 3.1 percent predicted in June to 2.7 percent. For the global economy, it increased its 2026 growth expectation from 2.8 percent to 2.9 percent.

2027 GROWTH FORECAST FOR Türkiye HAS ALSO DECREASED

A downward revision was made in OECD's 2027 projections for both Türkiye and the global economy.

While the 2027 growth forecast for the Turkish economy was reduced from 3.8 percent to 3.6 percent, the global growth expectation was reduced from 3.1 percent to 3 percent.

Thus, OECD updated Turkey's two-year growth outlook downwards.

OECD REVISED INFLATION FORECASTS UPWARDS

Price expectations for Turkey were also reconsidered in the report. The OECD increased its headline inflation forecast, announced in June, from 28.4 percent to 31.5 percent for 2026.

Turkey's 2027 headline inflation forecast was increased from 18.3 percent to 24.7 percent.

INTEREST EXPECTATIONS ARE DIFFERENT IN DEVELOPING ECONOMIES

The OECD report pointed out that monetary policy will move in different directions in developing economies.

Accordingly, India is expected to temporarily raise the policy rate in order to balance increasing inflation pressures.

It is estimated that interest rates will decrease as inflation follows a moderate course in Brazil, Indonesia, South Africa and Turkey. The report also included the prediction that interest rates will remain low in China.