Türkiye Plans Economic Expansion and Inflation Control by 2029

Aisha Mensah | AFP

Türkiye aims to grow its economy to $2.2 trillion and bring inflation to single digits by 2029, while creating 2.1 million jobs under its Medium-Term Program.

Türkiye is targeting an ambitious economic expansion to achieve a $2.2 trillion economy, along with creating 2.1 million new jobs by the end of 2029, according to Vice President Cevdet Yilmaz. These goals are part of Türkiye's strategic Medium-Term Program (MTP) outlined by national leaders during an international media gathering.

The MTP, presented by Yilmaz along with Treasury and Finance Minister Mehmet Simsek and Presidency of Strategy and Budget head Ibrahim Senel, sets the economic course for the country, emphasizing macroeconomic projections and policy priorities through 2029. This program not only guides the annual budgeting process but also identifies crucial areas for reform.

Yilmaz emphasized that the government aims to leverage past economic gains, projecting steady GDP growth from 3.3% in 2026 to 5% by 2029. Total factor productivity is anticipated to contribute significantly to this growth throughout the program duration.

Key Measures Against Inflation and Economic Pressure

To combat inflation, Türkiye's government expects to bring the inflation rate down from its peak of 75.5% in May 2024 to single digits by 2029. Yilmaz noted that the downward trend halted temporarily due to regional conflict; however, it is expected to resume as the effects of supply-side pressures ease.

Inflation stood at 31.5% in August, and the government projects a considerable drop by the end of 2029. The recent regional war has added an estimated 7 percentage points to the current inflation rates, affecting essential sectors like food and fuel, which comprise 34.5% of the consumer price index.

The administration attributes ongoing inflation easing to coordinated policy measures that aim to ensure price stability, benefiting Türkiye's sustainable growth and socio-economic equity.

Impact of Global Factors on Türkiye's Outlook

The regional conflict has also revised Türkiye's trading outlook, with weaker external demand and higher global commodity prices. Consequently, growth projections for key trading areas such as the eurozone and MENA have been adjusted downward.

The average price for Brent crude has been adjusted upward to $89.3 per barrel, affecting Türkiye’s trade deficit, which is expected to reach $105 billion in 2026. However, confidence in the Turkish lira is said to be increasing, with gross reserves seeing substantial growth since 2023.

Despite temporary setbacks, the government remains optimistic, with a concerted focus on market diversification, emphasizing new partners in Asia, particularly Japan, to stabilize and enhance trade.

Civic Implications of Türkiye's Economic Strategy

Urban centers across Türkiye stand to be significantly impacted by the country's economic trajectory. The planned job creation and focus on inflation control will likely accelerate urban development and public service capacity. Local governments may need to innovate in accommodating a rapidly expanding workforce and urban population in key cities like Istanbul and Ankara.

Mayors and city planners should seize this window to address infrastructure and housing shortages that have arisen in previous growth phases. The anticipated green and digital transition offers a unique opportunity to align urban planning with environmental sustainability, creating more resilient and future-ready cities.

Collaborative projects between municipal authorities and the central government in key sectors,such as vocational training to boost technological adaptation,could further strengthen urban economies, bringing about a balanced focus on expanding both urban and rural economies under the broader national plan.

Questions That Matter

What is Türkiye's economic target by 2029?

Türkiye aims to expand its economy to $2.2 trillion by the end of 2029. The plan also includes creating 2.1 million additional jobs and bringing inflation back to single digits.

What is the projected inflation rate for 2029?

The government expects the inflation rate to return to single digits by 2029. Previously, inflation peaked at 75.5% in May 2024 but has since been expected to decrease steadily.