As we leave 2024 behind, global and local economic dynamics offer important clues for 2025. While global inflation, growth rates, geopolitical risks and green transformation issues are among the priority agendas of economic administrations around the world, in Turkey, the fight against inflation, economic rebalancing and green transformation strategies stand out.

In 2024, economic and geopolitical developments were at the center of the global agenda. While the need for sustainability and digital transformation became more evident, policies in these areas started to turn into concrete steps. Especially inflationary pressures and the need for green transformation to combat climate change will continue to be among the priorities of economies and political agendas in 2025.

A second Trump term in the US may lead to a resurgence of protectionism in global trade policies. The European Union's steps to increase its competitiveness are also among the main issues to be closely monitored. For Turkey, 2025 holds both opportunities and risks. Maintaining price stability, achieving macro-financial balance and continuing the green, digital and social transformation processes are among the main objectives of the economic management.

In 2024, while central banks in advanced economies were cutting interest rates in order to minimize the possible negative effects on economic activity, conventional economic policies implemented in Turkey after the May elections continued in line with the objectives of achieving price stability and strengthening the fiscal balance. However, the disinflation process progressed more slowly than expected, especially due to expectations and rigidity in services prices.

One of the important developments for 2025 will be the European Union's Border Carbon Regulation Mechanism. This mechanism, which will come into effect in 2026, requires strategic preparations, especially by countries and companies exporting to Europe. In addition, digital transformation and the acceleration in technology will continue to be one of the important topics on corporate agendas.

According to International Monetary Fund (IMF) forecasts, global economic growth in 2024 was 3.2%. This is only 0.1 percentage points lower than the 3.3% growth in 2023. While growth rates remained strong in developed countries, the growth rate in developing countries slowed from 4.2% to 4.0%. Global inflation fell to 5.8% at the end of 2024, while the average inflation rate in advanced economies was 2.6%.

In 2024, the Turkish economy tried to contain inflation by constraining domestic demand through the Central Bank's tight monetary policies and interest rate hikes. The CBRT raised its policy rate to 50% in March 2024. Foreign capital inflows reached as high as USD 23 billion, while Turkish the lira became one of the most depreciated currencies against the US dollar. Despite this, market volatility declined.

Entering 2025, Turkey's growth expectations are set at 4%, while the continuation of tight monetary policies may make it difficult to reach this target. The European Union's carbon regulations and green transformation processes will have a direct impact on Turkey's exports. As part of strategies, Turkey needs to increase its green financing sources and invest in low-carbon technologies such as electric vehicle production.decarbonization

In 2024, Turkey's merchandise exports increased by 2.5% compared to 2023, reaching 262 billion dollars, the highest export level in the history of the Republic. Exports to the European Union increased by 4.2%, while Islamic exports to members of the Organization of Cooperation increased by 6.1% and to the Organization of Turkic States countries by 12.9%. In 2024, imports fell by 4.9% to 344.1 billion dollars, while the foreign trade deficit decreased by 22.5% to 82.2 billion dollars. The ratio of exports to imports rose to 76.1%.

The export target for 2025 was announced as 390 billion dollars. The 77-article 2025 Export Action Plan prepared by the Ministry of Trade aims to increase the global competitiveness of exporters and reach new records in foreign trade. Within the scope of the action plan, reforms will be made in many areas from financing to customs processes, from e-export to expanding green passport opportunities. In particular, support for green transformation and digitalization processes will contribute to Turkey's the European Union's Carbon Regulatory at the Bordercompliance with .Mechanism