Learn about the new economic program in Turkey and its expected impact on the real estate market

In its efforts to combat the effects of inflation in the country and face the challenges that the Turkish economy has encountered, the Turkish government has taken several steps to address this problem, which has cast its shadow over most sectors.

In this context, the Turkish government also announced its new economic program for the years 2025 to 2027, which includes fundamental changes in economic growth forecasts and a decline in inflation in the country, with a focus on enhancing financial stability through its approach based on tightening monetary policy.

Big Goals Require Strict Economic Policies

The new economic steps aim to achieve a number of ambitious results through several strict economic measures that will impact and put pressure on the inflation curve and growth path, with a new reading of the numbers according to current developments.

In this regard, Mr. Cevdet Yilmaz, the Vice President of Turkey, confirmed that the new economic program aims to achieve a gradual decline in inflation rates, aiming to reach single digits (meaning that annual inflation does not exceed reasonable limits), with its expected effect in increasing economic growth opportunities above its current level.

This will be achieved by focusing on enhancing productivity and increasing employment in order to improve overall economic performance, improve income, and raise the standard of living among citizens. This is done by balancing various monetary policies and raising income levels while curbing inflation.

Erdogan: "We Trust Our Medium-Term Economic Program"

Just a few days ago, Turkish President Recep Tayyip Erdogan expressed his support for the medium-term economic program, saying:

"At the same time as our relentless fight against the effects of inflation, we declare our confidence and support for the medium-term economic program, which prioritizes investment, exports, production, and employment."

In the same context, Mehmet Simsek, the Turkish Minister of Treasury and Finance, also confirmed that the top priority of the new economic program is to combat inflation and achieve price stability, which will enhance sustainable growth and raise the standard of living for citizens.

You may be interested: Economic Reform Plan in Turkey.

The New Economic Program in Numbers

The news details regarding the new economic program relate to inflation, growth, and the national income ratio:

Inflation

As for the objectives of the new economic program, it set the target inflation rate at 41.5% by the end of 2025, while it was at 33% in the previous program.

It is also expected that inflation in Turkey will reach 17.5% by the end of 2026, and 9.7% in 2027.

Growth

The program also lowered its growth forecast for the current year 2024 from 4% to 3.5%.

For 2025, growth is expected to reach 4% instead of 4.5%.

In 2026, the growth rate is expected to reach 4.5% instead of 5%.

Meanwhile, the new program set the target for Turkish economic growth in 2027 at 5%.

National Income

Regarding national income at the end of the current year 2024, the forecasts set the income at: 1 trillion and 331 billion dollars.

Meanwhile, per capita national income is 15,550 dollars, exceeding the previous forecast of 12,875 dollars.

Budget Deficit

According to Mr. Cevdet Yilmaz, the Vice President of Turkey, the goal is for the budget deficit to reach 4.9% of GDP by the end of the current year 2024,

The expected budget deficit to GDP ratio for the upcoming year 2025 is estimated at 3.1%.

Unemployment Rates

According to the new economic program, unemployment rates in Turkey are expected to drop to 9.3% in 2024, which is a significant improvement compared to previous economic estimates that revolved around 10.3%. This reflects the effectiveness of the adopted solutions and their impact on partial economic recovery.

This indicator is expected to continue declining until it reaches 8.8% in 2027, at the end of this short-term economic program.

Exports and Imports

The new economic program estimates that the country's exports will reach 264 billion dollars by the end of the current year 2024, a slight decrease from previous expectations.

Meanwhile, export value is expected to increase to 319.6 billion dollars by the end of the economic program in 2027.

On the other hand, imports are expected to decrease significantly by the end of the current year 2024, reaching 345 billion US dollars, instead of 372.8 billion dollars in the previous economic program.

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Exchange Rate

Expectations also revolve around the stability of the exchange rate until the end of the current year 2024 at about 33.2 lira per dollar in 2024.

The exchange rate is expected to continue rising to 42 lira in 2025, around 44.4 lira in 2026, and by 2027 to reach 46.9 lira.

Overall, the new economic program of the Turkish government for the period 2025-2027 comes as a continuation of the previous economic program for 2024-2026, and in order to reassess economic expectations for the coming period, based on the latest developments and achieved figures so far, on which a set of ambitious goals are hoped to be achieved in the medium term.

Amid Consecutive Economic Plans: Where Is the Turkish Real Estate Market Heading?

The vision of the new economic program is to achieve a gradual decline in inflation rates, address the deficit and unemployment rates, reflecting the Turkish government's efforts to redirect the economic course amid changing local and international conditions, and to provide a financially stable environment and real, ambitious structural reforms that will boost various local markets, including the Turkish real estate market.

After the recent decline in real estate prices, affected by current economic plans and measures, including the increase in interest rates, real estate experts expect the real estate market to regain momentum in the coming period, especially after property prices today have reached cost levels in many cases, which means the availability of investment opportunities worth seizing, with the potential to benefit from their returns in the future.

Contact Imtilak Real Estate to review the available opportunities now.

Edited by: Imtilak Real Estate©