A major player on the regional scene, Turkey has experienced rapid development and transformations in recent decades, creating new opportunities, but also major imbalances. Its challenge today: to combine macro-financial stability and sustainable growth with fair and sustainable development. AFD Group and its local partners in Turkey are working for more balanced and sustainable growth, as well as a transition to a lower carbon economy.
Produced by AFD's team of risk-country economists, country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.
Emphasis is placed on developing countries, particularly in Africa, for which macroeconomic analyses are rare or infrequent. AFD seeks to complement existing production on the global economic situation, more focused on advanced economies and major emerging countries.
Find out more: Macroeconomic Analyses at AFD
Country-risk analysis is based on a close follow-up over a long period of time and rooted in a fine knowledge of local contexts. Cyclical trends, often highlighted in the news, are always examined in the light of structural trends and of the regional context in which they take place. The aim is to highlight country-specific macroeconomic issues while assessing risks against comparable time- and space-based trajectories.
Country-risk economists place the study of socio-political vulnerabilities, the growth model, the viability of public debt, external balances and the soundness of the financial system at the heart of their assessment, and give specific attention to countries' exposure to climate risks.
The third decade of the Erdoğan-AKP era, which is beginning at the same time as the second centenary of the Republic of Turkey, needs to place the economy, prosperity and national cohesion at the heart of priorities. The return to a credible and effective monetary policy, led by an independent Central Bank and taken up by a relatively sound banking sector per se, should be followed by fiscal consolidation from 2025 onwards, after the slippage in 2023-2024, partly due to exceptional expenditures for post-earthquake reconstruction. Reforms are also expected to improve the business environment, support non-price competitiveness, productivity, attractiveness to investors, the external position, economic growth potential, and the green transition.
Download our publications on the macroeconomic situation of Turkey:
- “Turkey: Restoring confidence and attractiveness”, in MacroDev Semestrial Panorama #57 (July 2024)
- “Turkey: Maintaining new course, for prosperity... and posterity”, MacroDev #56 (June 2024)
- “Turkey: The risky gamble of economic heterodoxy”, in MacroDev Semestrial Panorama #46 (January 2023)
- “Development finance fragmentation and diversification: the case of China, India and Türkiye”, in MacroDev Semestrial Panorama #43 (October 2022)
Contact:
- Sylvain Bellefontaine, country-risk economist, AFD
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