UPDATE - Türkiye aims for average GDP growth of 4.5% in 2024-2026

UPDATES WITH REMARKS FROM PRESIDENT ERDOGAN; REVISES HEADLINE, DECK

By Tuba Ongun and Gokhan Ergocun

ISTANBUL (AA) - The Turkish government is aiming for a 4.5% gross domestic product growth rate on average in 2024-2026, according to the government's medium-term economic program released on Wednesday.

Unveiling the program, Vice President Cevdet Yilmaz said the Turkish economy is projected to grow 4% next year, 4.5% in 2025, and 5% in 2026.

"Türkiye, for the first time, foresees joining high-income countries with an economic size exceeding $1.3 trillion by the end of the program (end-2026), reaching $14,855 per capita income," said Turkish President Recep Tayyip Erdogan about the program.

In 2022, Türkiye's economy grew 5.5% year-on-year, according to revised TurkStat data.

Erdogan also pledged to eliminate the structural factors that push up inflation through implementing monetary, fiscal, and income policies with all their means.

Türkiye's year-end inflation rate is expected to come in at 65% this year, 33% next year, 15.2% in 2025, and 8.5% in 2026, Yilmaz said.

According to the latest data from the country's statistical authority, Türkiye's annual inflation reached 58.94% in August.

The country's exports are foreseen to hit $255 billion in 2023 and rise to $302.2 billion in 2026, Yilmaz added.

Türkiye is forecast to generate tourism income of $55.6 billion this year and $71.3 billion in 2026, he also said.

Türkiye's current account deficit-to-GDP ratio is expected to fall to 4% in 2023 from 5.3% in 2022, and to 2.3% in 2026, the vice president said.

Some 909,000 jobs will be generated a year during the program, and the unemployment rate is set to drop to single digits by end-2026, Erdogan said.

The program project that next year’s unemployment rate will be 10.3% followed by 9.9% in 2025 and 9.3% in 2026.

While facilitating access to finance with a target-oriented and selective approach, the government will avoid practices that may lead to inflationary pressure, Erdogan said.

The new program will boost domestic production and accelerate technological transformation in industry, support services trade, and focus on efforts to update the Customs Union, the president explained.

"We aim to attract direct investment flows to our country by strengthening bureaucratic and legal predictability," Erdogan said.

Under the 2053 net zero emission target, the government will work to achieve green transformation in all areas of the economy, Erdogan said, adding that the program aims to adjust the national emissions trading system to comply with the EU Carbon Border Adjustment Mechanism.