Türkiye’s economy experienced a transformative year in 2024, marked by significant policy shifts aimed at tackling inflation and stabilizing markets.
The year began with strict monetary policies, but ended with a notable change in strategy, as the Central Bank shifted its focus from aggressive tightening to a more balanced approach.
The highlight of 2024 was the Central Bank’s successful efforts to tame inflation, which fell to a 17-month low of 47.09% in November.
This was achieved through a series of interest rate hikes, which peaked at 50% mid-year.
However, in a surprise move, the Central Bank cut its key interest rate for the first time in nearly two years in late December, trimming the policy rate to 47.5%.
The international community took notice of Türkiye’s economic progress, with global credit rating agencies Moody’s, Fitch, and S&P Global upgrading the country’s rating significantly throughout 2024.
This reflected growing confidence in Türkiye’s economic management and its commitment to addressing structural challenges.
Other notable developments in 2024 included a significant improvement in Türkiye’s international reserves, which hit a record level of $159.4 billion, and a decline in the country’s five-year credit default swaps (CDS) to below 250 basis points for the first time since February 2020.
The Turkish stock market also reflected renewed investor sentiment, with the benchmark BIST 100 stock index rising nearly 34% by year-end, led by gains in the banking and industrial sectors.
Despite these positive developments, Türkiye’s economy faced challenges, including a rising unemployment rate, which reached 8.8% in October, and slowing GDP growth, which contracted by 0.2% quarter-on-quarter in both the second and third quarters of 2024.
Overall, 2024 was a transformative year for Türkiye’s economy, marked by significant policy shifts and notable progress in tackling inflation and stabilizing markets.
