Economy
EBRD lifts Türkiye’s growth outlook after strong 2025 performance
The European Bank for Reconstruction and Development (EBRD) has upgraded its growth outlook for Türkiye as the macroeconomic stabilization program balances growth and disinflation objectives, it said in a report published on Thursday, citing also a better-than-expected performance in 2025.
Real gross domestic product (GDP) growth is now projected to accelerate and stand at 4.0% in 2026 and 4.5% in 2027, the bank said in its report covering regional prospects. Earlier, in the report from September 2025, the bank predicted Türkiye’s growth to be at 3.5% this year.
“In Türkiye, growth picked up from 3.3% in 2024 to an estimated 3.7% in 2025, reflecting better-than-expected outturns across most sectors despite episodes of market volatility and a tight fiscal and monetary policy mix,” the EBRD said.
Strong private consumption and investment offset lower net exports on the demand side, while weak agricultural performance was compensated for by stronger activity in other areas of production.
Financial conditions stabilized and investor confidence recovered in the second half of 2025, the bank suggested, as evidenced by narrower credit default swap (CDS) spreads and improved access to international capital markets. Meanwhile, gross international reserves climbed above $200 billion for the first time, it added.
The EBRD, in its report, also pointed out that the seasonally adjusted unemployment rate fell from 8.6% at the end of 2024 to 7.7% at the end of 2025 and that headline annual inflation declined from its May 2024 peak of 75.5% to 30.9% in December 2025, supported by tight monetary conditions.
Meanwhile, average growth in the EBRD regions picked up to stand at an estimated 3.4% in 2025, with the bank expecting average growth to rise to 3.6% in 2026 and 3.7% in 2027.
The economies where the EBRD invests are continuing to navigate global trade tensions and geopolitical uncertainty, while resilient domestic demand and rapid adjustments in global supply chains are supporting economic activity.
The EBRD is one of Türkiye’s key investors, with more than 23 billion euros ($27.1 billion) committed across the country since 2009, largely in the private sector.
Tariffs impact
Meanwhile, the bank also said that the economic impact of U.S. President Donald Trump’s tariffs was “much lower” than expected last year, as it raised its growth forecast for 2026.
The U.S. Supreme Court last week struck down much of Trump’s tariff policy, prompting him to impose a new 10% duty under a different law, which he has vowed to raise to 15%.
But for countries where the European Bank for Reconstruction and Development operates, these developments will only bring “very limited” changes, chief economist Beata Javorcik told Agence France-Presse (AFP).
The EBRD was founded in 1991 to help former Soviet bloc nations embrace free-market economies, before extending its reach to the Middle East, North Africa and parts of sub-Saharan Africa.
“The impact of the U.S. tariffs for our countries of operation has been limited, much lower than anticipated,” Javorcik said.
“There are some countries that potentially could gain to see lower tariffs, like Serbia, Bosnia-Herzegovina, Moldova or Tunisia, but overall the picture is unchanged,” Javorcik said.
She cautioned that “we have not felt the full impact of tariffs yet,” as a large share of 2025 exports reached U.S. markets before the measures took effect.
The EBRD also said that the artificial intelligence boom has boosted U.S. imports of technology-related goods, including semiconductors.
This could benefit countries in Central Europe, the Baltics, Bulgaria and Romania that export these types of products, Javorcik said.
Borge Brende, president and chief executive of the World Economic Forum (WEF), said he was resigning on Thursday amid controversy over his links to late sex offender Jeffrey Epstein, becoming the latest in several high-profile personalities to leave the post in the face of the Epstein files’ revelations.
Brende, a former Norwegian foreign minister who led the WEF for over eight years, is the latest figure to step down after his name was discovered in the millions of newly released documents related to the investigation into the late U.S. sex offender.
Being named in the files does not in itself imply wrongdoing or illegal behavior.
“After careful consideration, I have decided to step down as President and CEO of the World Economic Forum,” Brende said in a statement released by the WEF that does not explicitly mention Epstein.
“I am grateful for the incredible collaboration with my colleagues, partners, and constituents, and I believe now is the right moment for the Forum to continue its important work without distractions.”
WEF co-chairs Andre Hoffmann and Larry Fink thanked Brende for his “significant contributions” to the organization, which is best known for its annual high-profile gathering in the Swiss resort town of Davos.
Following massive public pressure, the Trump administration late last year began releasing millions of files from federal investigations into Epstein, who died in a New York prison in 2019 after being charged with sex trafficking of minors.
The Epstein files include scores of documents that have laid open the late billionaire’s wide-ranging contacts with the world’s elite, from politicians and royalty to scholars and actors.
Brende’s name also appears in the files, showing that he had been in touch with Epstein in 2018, years after he was first convicted of procuring a minor for prostitution in 2008.
Brende initially denied having had any contact with Epstein. He later admitted to having dined with the U.S. financier several times in 2018 and 2019.
According to Norwegian broadcaster TV2, Brende sent Epstein several text messages, which Brende said he had no recollection of. He also denied having been aware of Epstein’s criminal behaviour as well as his past.
An independent review launched by the WEF into the matter did not find any “additional concerns beyond what has been previously disclosed,” according to the statement.
Brende, in comments to Norwegian daily Dagens Næringsliv, acknowledged that his links to Epstein could distract from the WEF’s work.
However, the “external review” into the matter did not reveal anything that was “not already known and thoroughly covered in the media,” he said.
Brende served as Norwegian foreign minister from 2013 to 2017, when he became president and chief executive of the WEF. The organization’s annual conference in Davos brings together some of the most powerful figures from the worlds of politics and finance.
Other high-profile Norwegian figures that feature in the Epstein files include Crown Princess Mette-Marit and former prime minister Thorbjorn Jagland.
The International Monetary Fund (IMF) has unlocked close to $2.3 billion in funding for Egypt after its latest program reviews, it said on Wednesday, as the country pushes to liberalize its economy.
Egypt secured an expanded $8 billion package over nearly four years from the IMF in March 2024, contingent on a series of economic reforms.
In March last year, the global lender approved a new loan worth $1.3 billion for Egypt.
After completing the fifth and sixth reviews of the Extended Fund Facility, the IMF said on Wednesday that around $2 billion will be unlocked for Egypt.
At the same time, it will be able to draw an extra $273 million under the Resilience and Sustainability Facility (RSF) after the first review was completed, the IMF said in a statement.
“Egypt’s macroeconomic situation has improved amid sustained stabilization efforts,” the organization said.
“Tight monetary and fiscal policies together with exchange rate flexibility have helped restore macroeconomic stability, reduce inflation, and strengthen the external position.”
But it warned that structural reforms under the program have been “uneven” and efforts to reduce the state’s footprint “have been slower” than predicted.
Türkiye’s sovereign wealth fund is in talks with international partners on a potential $10-billion petrochemical project in the country, according to its chief executive, Salim Arda Ermut, on Wednesday.
Ermut also said the Türkiye Wealth Fund (TWF) was ready to use its mandate to invest abroad, when conditions are favorable, citing recent cooperation agreements with the Abu Dhabi sovereign wealth fund, Hungary, Oman and most recently Bank of China.
It aims to establish joint vehicles with the partners to provide financing in those countries and in third markets, he told a meeting of the Istanbul Chamber of Industry (ISO).
At home, the fund has long been working on strategic sectors such as petrochemicals and conducted studies for a major project, he said.
“In petrochemicals, we are in contact with international companies. It is a project worth a total of $10 billion. This could move forward through a partnership structure or in the form of a cluster,” he added.
The TWF was established in 2016 to manage state-owned assets and make strategic investments to support economic development. It holds stakes across sectors, including finance, energy, transport, telecommunications, and now also owns the country’s largest gold producer, Turkish Gold Mining.
Ermut also said TWF was working on an agreement with an international fund to invest in local companies with export potential.
Türkiye is keen to deepen cooperation with South Korea in nuclear power, artificial intelligence, semiconductors, battery technologies and renewable energy, Energy and Natural Resources Minister Alparslan Bayraktar said on Wednesday.
Bayraktar was speaking in Seoul on the sidelines of the Türkiye-South Korea Joint Economic Commission meeting, which he co-chaired with South Korea’s Deputy Prime Minister and Finance Minister Koo Yun-cheol.
Opening the meeting, Bayraktar said the relationship between the two countries rests not only on trade and diplomacy but also on shared history and strong people-to-people ties.
He said bilateral trade reached $11 billion in 2025 and that South Korea’s investment stock in Türkiye stands at about $1.9 billion.
Bayraktar said South Korean President Lee Jae-myung’s recent visit to Türkiye and his talks with President Recep Tayyip Erdogan had given fresh momentum to relations.
“Supporting this political will with concrete projects in the economic field should be our common goal,” he said.
The minister described Türkiye as a competitive production and export hub for South Korean companies, pointing to its young and skilled workforce, large domestic market and access to the European Union through the customs union, as well as to the Middle East, North Africa and Central Asia.
He said Ankara wants to expand cooperation in energy, transportation, infrastructure, defense, science and technology.
“We prioritize the development of joint projects in strategic areas such as nuclear energy, artificial intelligence, semiconductors, battery technologies, critical minerals, innovation and renewable energy,” he said.
The two sides signed the protocol of the Joint Economic Commission meeting after the talks.
Talks on new reactors
During his visit, Bayraktar also met executives from major South Korean energy and mining companies and industrial groups at a roundtable where he outlined Türkiye’s long-term energy plans.
He reiterated Türkiye’s goal of reaching 20 gigawatts of nuclear power capacity by 2050 and noted that four reactors are currently under construction.
“We are a growing market and our demand is constantly increasing,” he said. “The current construction is being carried out by a Russian company, but within the scope of our nuclear vision, we are in very close and intensive talks with KEPCO for new reactors.”
During the visit, Bayraktar also met Kim Dong-cheol, chief executive of the Korea Electric Power Corporation.
He added that Türkiye is closely monitoring developments in small modular reactors, or SMRs, and signaled further discussions on their potential role in the country’s energy transition.
Bayraktar also encouraged cooperation beyond the two countries’ borders. “With Turkish companies, Türkiye and Korea can collaborate in the Middle East, Africa, and Central Asia,” he said. “This way, we can combine our strengths to act jointly in different countries and regions.”
On the sidelines of the meeting, Bayraktar held talks with South Korea’s Minister of Climate, Energy and Environment Kim Sung-hwan.
In a post on Turkish social media platform NSosyal, he said that they reviewed existing partnerships and explored new opportunities in renewable energy, nuclear power and electricity transmission infrastructure.
“We agreed on a working agenda that will reflect the experience of both countries, primarily focusing on supply diversity to strengthen energy supply security and potential collaborations in third countries,” he said.
Bayraktar also met South Korea’s Trade, Industry and Energy Minister Kim Jung-kwan to discuss cooperation in nuclear energy and critical minerals.
He said Türkiye sees nuclear power as a key pillar of its energy supply security in line with its 2053 net-zero emissions target.
“We evaluated areas of joint work that will strengthen technical cooperation in nuclear technologies, engineering capacity and local industry contributions,” he said.
“We also discussed concrete cooperation options that will enhance the complementary capacities of the two countries in the field of critical minerals,” he said.
Türkiye and Syria aim to further improve bilateral trade, planning to have a joint mechanism meeting and an investment forum in the upcoming period, Trade Minister Ömer Bolat said Wednesday.
The minister spoke with Kuteybe Ahmed Bedevi, the head of the Syrian General Administration of Border Crossings and Customs, and Nidal al-Shaar, the Syrian minister of economy and industry, Bolat said on the Turkish social media platform NSosyal.
Bolat and Bedevi comprehensively evaluated cooperation in the field of customs, including the improvement and acceleration of processes in mutual trade, he said.
The discussions also focused on the modernization and expansion of customs gates and the acceleration of transit passages between the two nations, according to Bolat.
“We agreed to hold the first meeting of the Türkiye-Syria Joint Customs Committee, signed in December, as soon as possible,” he wrote.
Moreover, he suggested that the strengthening of logistics networks will contribute to regional connectivity by drawing strength from the energy created by the new administration in Syria.
Bolat and al-Shaar, at the same time, evaluated steps to further strengthen investment relations and the total trade volume, which reached $3.7 billion last year.
“We have agreed to hold the JETCO (Joint Economic and Trade Committee) mechanism meeting, established between the Turkish and Syrian Ministries of Trade, in the spring. We also decided to hold a comprehensive business and investment forum on the sidelines of the meeting,” he also said.
“We will continue our efforts to increase our trade with Syria and strengthen our bilateral partnerships,” Bolat highlighted.
U.S. President Donald Trump proclaimed during a marathon State of the Union on Tuesday that “we’re winning so much,” arguing that his policies have fueled an economic boom at home and imposed a new world order abroad in hopes it can counter his sliding approval ratings.
Trump’s main objective was convincing increasingly wary Americans that the economy is stronger than many believe, and that they should vote for more of the same by backing Republicans during November’s midterm elections.
In all, Trump spoke for a record 108 minutes, breaking – by eight minutes – the previous time mark from his address before a joint session of Congress last year.
Heeding calls from Republican lawmakers worried they could lose their congressional majority later this year, Trump spent the first hour of his televised speech focused on the economy, saying he had slowed inflation, driven the stock market to record heights, signed sweeping tax cuts and lowered drug prices.
But it was unclear whether his rosy assessment would assuage Americans’ anger about the cost of living. Trump sought to blame his Democratic predecessor, Joe Biden, for high prices, but opinion polls show voters hold Trump responsible for not doing more to ease an affordability crisis after he campaigned relentlessly on the issue.
“Our nation is back – bigger, better, richer and stronger than ever before,” Trump said after taking the stage to cheers of “USA, USA” from fellow Republicans in Congress, with dozens of empty seats on the Democratic side a reminder that many lawmakers skipped the speech for anti-Trump rallies outside.
Fraught moment
The annual speech to Congress came at a fraught moment for Trump’s presidency, with polls showing a majority of Americans have soured on his performance, anxieties rising over Iran and his signature tariff policy foundering after the U.S. Supreme Court struck down most of his import taxes.
For much of the speech, Trump was uncharacteristically disciplined, mostly appearing to stick to his prepared remarks and eschewing his usual stream-of-consciousness digressions. But he flashed his combative side while discussing his immigration crackdown, exchanging shouted insults with several Democratic lawmakers.
“Our country is winning again. In fact, we’re winning so much that we really don’t know what to do about it. People are asking me, ‘Please, please, please, Mister President, we’re winning too much. We can’t take it anymore,'” Trump said.
The president championed his immigration crackdowns and his push to preserve widespread tariffs that the Supreme Court just struck down. He drew applause only from Democrats while describing the high court’s decision, which he called “an unfortunate ruling.”
Trump vowed to plow ahead, using “alternative” laws to impose the taxes on imports and telling lawmakers, “Congressional action will not be necessary.” Trump argued that the tariffs are paid by foreign countries, despite evidence that the costs are borne by American consumers and businesses. “It’s saving our country,” he said.
The only Supreme Court justices attending were Chief Justice John Roberts, as well as Justices Brett Kavanaugh, Amy Coney Barrett and Elena Kagan. Trump greeted them personally before the speech, despite last week slamming Coney Barrett – who he appointed to the high court in his first term – for siding with the majority against his tariffs.
Democrats also stood for Trump vowing to halt insider trading by members of Congress. But Rep. Mark Takano, a California Democrat, yelled, “How about you first!” Rep. Rashida Tlaib, a Michigan Democrat, called out, “You’re the most corrupt president!”
When some heckling continued, Trump proclaimed, “You should be ashamed of yourselves.” Later, he pointed at Democrats and proclaimed, “These people are crazy.”
Cost of living
Trump didn’t dwell on efforts to lower the cost of living – despite polling showing that his handling of the economy and kitchen-table issues has increasingly become a liability. Such concerns about the high costs of living helped propel Democratic wins around the country on Election Day last November.
There also are persistent fears that tariffs stoking higher prices could eventually hurt the economy and job creation.
While Trump said inflation is “plummeting,” prices for groceries, housing, insurance and utilities remain significantly higher than they were a few years ago. New data released on Friday showed the economy slowed more than expected last quarter while inflation accelerated.
It is potentially politically perilous ahead of November elections that could deliver congressional wins to Democrats, just as 2018’s blue wave created a strong check to his administration during his first term.
A Reuters/Ipsos poll found only 36% of Americans approve of Trump’s handling of the economy. Democrats hope to seize control of both houses of Congress from Republicans in November when all 435 seats are on the ballot for the House of Representatives and about a third of the 100 seats in the Senate.
On Tuesday, Trump blamed his predecessor, former President Joe Biden, along with Democratic lawmakers in the chamber, saying they were responsible for rising prices and health care costs, two issues his political opponents have repeatedly raised against him.
“You caused that problem,” Trump said of affordability concerns. He added a moment later, “They knew their statements were a dirty, rotten lie.”
Trump also said he’d press tech companies involved in artificial intelligence to pay higher electricity rates in areas where their data centers are located. Such data centers tend to use large volumes of electricity, potentially increasing the cost of power to other consumers in the area.
Another notable off-script moment came as Trump was referencing prescription drug prices, saying, “So in my first year of the second term – should be my third term – but strange things happen,” prompting at least one chant in the chamber of “Four more years!”
Virginia Gov. Abigail Spanberger, a Democrat whose decisive victory in November was an early midterm warning sign for Republicans, delivered her party’s official response, criticizing Trump for abandoning struggling Americans.
“Is the president working to make life more affordable for you and your family?” she said. “We all know the answer is no.”
Spanberger slammed the president’s aggressive immigration policies, his widespread cuts to the federal government and his tariffs.
“Even though the Supreme Court struck these tariffs down four days ago, the damage to us, the American people, has already been done. Meanwhile, the president is planning for new tariffs,” she said. “Another massive tax hike on you and your family.”
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