Credit growth in local currency decelerated to 30% YoY in August 2024, down from 69% one year before. A more restrictive policy mix is expected to prolong the near-term economic slowdown, with real GDP growth of 3.5% in 2024 (although higher than a previous projection of 3.2%), and 3.2% in 2025 (unchanged), down from 4.5% in 2023.
Carefully Managed Policy Adjustments Unwind External Imbalances, Rebuild Buffers
The continued benefits of Türkiye’s monetary policy pivot, assuming the authorities hold their course, remain significant in putting the economy on a sounder footing in terms of financial stability and potential growth.
One key indicator of progress is moderating tensions on the balance of payments, due to lower financing requirements and more diversified funding sources.
The current account turned positive in June-July 2024 and the surplus will widen further…
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