CEFIS Shares Insights on the Turkish Economy in "2024 Outlook and Expectations for 2025" Panel

The "2024 Outlook on the Turkish Economy and Expectations for 2025" panel, organized by the Department of Economics, the Financial Economics Master's Program, and the Center for Financial Application and Research (CEFIS) at Istanbul Bilgi University, shared critical analyses regarding global and local economic agendas. The panel featured İstanbul Bilgi University Economics faculty members Prof. Dr. Asaf Savaş Akat, Prof. Dr. M. Ege Yazgan, and Prof. Dr. Erhan Aslanoğlu, who specifically addressed global inflation, fluctuations in energy prices, supply chain issues, and the structural transformation requirements of the Turkish economy. Predictions for 2025 were also discussed in the event attended by numerous academics, students, and industry representatives.

Opening the panel, Prof. Dr. Serda Selin Öztürk emphasized the impact of global economic fluctuations, stating: "In recent years, geopolitical tensions and the effects of the post-pandemic period have revealed both Turkey's vulnerabilities and its flexibilities. New approaches in monetary policy, fiscal discipline targets, and reform efforts in financial markets signify important steps to strengthen the stability of our economy. However, issues such as inflation, exchange rate volatility, and the current account deficit remain primary concerns that need ongoing attention."

Prof. Dr. Asaf Savaş Akat shared his evaluations regarding the Turkish economy for 2024 and predictions for 2025, bringing global economic issues to light. He highlighted that the two most important issues globally are the Trump and China problems: "With Trump's influence, particularly through protectionist policies, the trend of globalization will shift towards regionalization. The China issue is not a temporary one; China’s technological superiority and its role in global trade further exacerbate tensions with the U.S.," he said.

Akat indicated that he does not expect major short-term shocks in the upcoming period, but noted, "However, transitional periods are always challenging. Turkey may experience lower growth in 2025. I see Turkey as a country that will not be able to grow in the near future but will also not face major upheavals." He suggested that inflation might drop to around 35, but expected the Turkish lira to continue depreciating, with the exchange rate fluctuating between 45 and 50 TRY. Akat remarked, "We have a very unique experience in Turkey over the past 50 years. We can easily reduce high inflation to high inflation. But then the problem begins; I believe we will struggle to bring inflation below 30."

Prof. Dr. Erhan Aslanoğlu focused particularly on the economic competition between China and the U.S. on a global scale, as well as deflationary tendencies in China. He observed that the U.S. closely monitors China's advancements in digital currency and technology, stating: "While the U.S. seeks to maintain the global power of the dollar, China is pursuing a strategy to promote the digital yuan. However, deflation in China signals problems, especially in its export-driven growth model. This situation will create significant impacts on economic power balances in the coming years. I predict that with the increase of protectionist policies, the growth rate in the global economy will fall below normal."

Focusing on Turkey, Aslanoğlu commented: "What I see is that we will need a change in the design of our economic policies. This change is critical for ensuring the sustainability of economic growth and for building resilience against external shocks. Additionally, we must consider the impact of carry trade strategies in emerging markets like Turkey."

Prof. Dr. M. Ege Yazgan noted that Chinese technology surpasses American technology in many fields, stating, "Technologies like WeChat, which are developed in an extremely cheap and efficient manner, showcase China’s technological superiority. It is entirely understandable that the U.S. wants to compete with China in this area; it does not want to lose its advantage. Trump aims to revitalize domestic industry through a trade war against China. However, trying to reduce the external trade deficit while maintaining the dollar's global dominance is a contradictory approach." Discussing the Turkish economy, Yazgan expressed concerns about the possibility of Turkish inflation staying below 30, stating, "Almost all around the world, inflation has been brought under control post-pandemic, with very few exceptions. The inflation we experience has been partly due to the pandemic. However, while the rest of the world is raising interest rates, we have opted for lowering them, entering another adventure. That adventure did not generate the investment surge one would expect. It created an effect that hindered growth and curtailed investments."