2025 Predictions
aka "Turkey precap"
Welcome to 2025! Or 2026 if you’re in Yozgat, which we predict will continue to be the butt of most Anatolia jokes this year.
It’s time for our annual predictions issue, and we’ve collected forecasts from many of Turkey’s top commentators on domestic politics, foreign policy and the economy.
All foresight is best served with hindsight, so while you’re here, check Turkey recap’s most-read reports of 2024:
Emine Akgül: An earthquake 'miracle’. An ongoing struggle. (Eng) (Tur)
Trash money: Turkey is formalizing its waste sector. Informal collectors want to be included. (Eng) (Tur)
Turkey banned a hazardous pesticide in 2020. It’s still showing up in food. (Eng) (Tur)
Exiled by high rents: A growing number of people are getting priced out of İstanbul (Eng) (Tur)
Sour grapes: New directive threatens to shutter Turkey’s boutique wineries (Eng only)
With a track record like that, we forecast Turkey recap contributors will keep covering major national trends before other English-language outlets.
Subscribe here on Substack (or on Patreon for a student discount) and let us help you keep track of the fast-paced Turkey news cycle. A big thank you to our supporters! Now on with the predictions:
DOMESTIC POLITICS
Seda Demiralp, professor and chair of the International Relations department at Işık University in İstanbul
Turkey enters 2025 with a sudden turn of events in its politics. 2024 had been highly rewarding for the opposition, with the main opposition party, CHP, emerging as the leading party for the first time in over 40 years following its victory in the 2024 municipal elections.
Yet recent developments in Syria appear to have given Pres. Erdoğan leverage in domestic politics. While the future of Syria remains uncertain, Erdoğan may retain this advantage, especially if he can assert control over the Kurdish movement.
This could not only help him consolidate his own voter base by turning the situation in Syria to his favor but also secure Kurdish support at home — particularly if the process benefits ordinary Kurdish citizens in Turkey. Kurdish support is crucial for Erdoğan to secure enough parliamentary backing for a potential constitutional change that could allow his re-election.
Erdoğan's growing political advantage could pave the way for early elections in upcoming years – though not likely in 2025 – which may open the door for his re-election, even in the absence of a constitutional change.
Assoc. Prof. Neslihan Çevik, a political consultant at Tr-Navigator and ex-politician, former spox for the Democrat Party and deputy chair of the Future Party
Even though early elections in 2025 have been discussed, it’s highly unlikely they’ll happen before 2027. The government needs time to let austerity measures, foreign aid and credits stabilize the budget while leveraging developments in Syria for domestic political gains.
Also, Öcalan is not expected to make a physical appearance in parliament despite occasional calls for such a move.
While discussions about a new constitution may gain traction in 2025, it’s unlikely to materialize before early 2026. The government needs time to prepare the public for potential changes and negotiate with opposition parties to secure 400 parliamentary votes, avoiding the need for a referendum.
Despite talks of mergers and some parliament members’ willingness to switch to the AKP, smaller parties formed by former AKP members are unlikely to join the ruling party in 2025 but are likely to support constitutional amendments when the time comes.
Keeping these parties in the opposition would actually benefit the AKP by creating the impression of widespread support and lending greater legitimacy to the proposed changes.
Roj Girasun, director of Rawest Research
The most important agenda item in Turkey’s 2025 domestic politics will be the Kurdish issue and the quest for a solution. The process will gain momentum in early 2025, and discussions will intensify even more.
We are entering a period that will require new positions to be taken by both the government and the opposition. Turkey’s political atmosphere may go beyond bipolar polarization. While the opposition embarks on the new quest, discourses and leadership discussions may overcome the static structure shaped by mayors. A more dynamic political atmosphere seems to emerge.
Another important topic will be the Syrian issue. Turkey’s gains in Syria and foreign policy moves may become a factor that will determine domestic politics. In this process, I think that actors who produce discourse and are assertive on foreign policy will be more visible in 2025.
Turkey seems to be leaving the concepts of alliances and balanced politics behind and opening the doors to a new political era.
Dimitar Bechev, a lecturer at Oxford University’s School of Global and Area Studies and a senior fellow at Carnegie Europe
The Kurdish Opening 2.0 will be at the center stage of Turkish politics. It could prove critical for Erdoğan's survival in power beyond 2028, which is contingent on a new round of constitutional changes.
There are positive signals from both the governing coalition and the DEM party. The party's leadership's recent meeting with Abdullah Öcalan in the high-security prison on İmrali island augurs well.
The fall of the Assad regime in Syria and the ongoing negotiation between the country's new leadership and the SDF over its reintegration into the military and over Syrian Kurds' place in politics will strengthen the Turkish government's hand. It gives Ankara extra leverage over DEM, which would be keen to have Syria's Kurds retain their gains made over the past decade.
However, as in 2013-2015, many things can go wrong. What's critical is how high a price Erdoğan would demand from DEM, and whether the PKK top brass would go along with a deal favored by civilian politicians and Öcalan.
Berk Esen, assoc. prof. of political science and international relations at İstanbul's Sabancı University
The main opposition party’s victory in the 2024 local elections marks a watershed moment with significant implications for the coming year.
In response to the collapse of his party’s local hegemony, Erdoğan is likely to focus on stabilizing and revitalizing the Turkish economy to consolidate his base and counter the growing influence of prominent opposition mayors.
The government’s primary objective appears to be the fragmentation of the opposition bloc while bolstering its support among Kurdish voters. Erdoğan also seeks backing from Kurdish MPs to amend the constitution, allowing him to run for a third term and altering electoral laws to ease this process.
Meanwhile, the opposition parties remain entangled in open contests and internal divisions following the 2024 local elections. Both the CHP and İYİ leaderships will work to resolve internal disputes and craft an alternative agenda to counter Erdoğan’s maneuvers.
Discussions surrounding the selection of a joint presidential candidate will persist throughout the year, particularly with the looming risk of a political ban on İmamoğlu.
Seren Selvin Korkmaz, co-director of the İstanPol Institute and Mercator-IPC Fellow at the İstanbul Policy Center
A new political paradigm is emerging in Turkey, driven by the fall of Assad in Syria, shifting foreign policy dynamics and Erdoğan’s domestic strategy. Three government tactics stand out and may create challenges for the opposition.
First, portraying Assad’s collapse as a foreign policy victory, boosting national pride. Second, the “Kurdish opening process” could extend Erdoğan’s political reach and reshape alliances, strengthening the ruling bloc. Third, a possible new constitution process could tighten the government’s grip on power.
Meanwhile, the opposition has failed to keep pace with these changes, leaving many citizens unsure of their vision. Popular opposition mayors like İmamoğlu and Yavaş must adapt if they hope to win the next election.
So far, poll-based politics have overshadowed genuine strategy, weakening the opposition’s appeal. Additionally, the CHP, perhaps unintentionally, becomes a “municipality party”, prioritizing local governance over crucial issues like the economy and foreign policy, allowing the ruling coalition to dominate these areas.
SYRIA POLICY
Aron Lund, a fellow at Century International and a Middle East analyst at the Swedish Defence Research Agency
Assad’s ouster in Syria was a geopolitical jackpot for Turkey, but there’s good news and bad news.
The good news (for Ankara) is that the jihadis that seized Damascus are long-standing Turkish partners, and that Syria’s PKK proxies seem more vulnerable than ever.
The bad news is that Turkey’s surging influence is only partly a reward for past policies. It’s also because the new Syrian regime desperately needs support. Syria is an economic wasteland. It remains unclear if state institutions can survive the change of leadership plus a withdrawal of Russian and Iranian assistance, with Western sanctions still in place. In a country so awash in weapons and vendettas, consolidating power on a bare-bones budget won’t be easy, or pretty.
As thrilled as Erdoğan may be to see Assad go, he has reasons to worry. If mishandled, Syria’s regime change could be the prelude to state collapse.
Amy Austin Holmes, a prof. of international affairs at George Washington University and author of the new book, Statelet of Survivors: The Making of a Semi-Autonomous Region in Northeast Syria
There was an opportunity to resolve this conflict prior to the fall of Assad, when Russia and Iran were distracted. But instead of the US or any other state actor taking the initiative, non-state actors did. So 2025 could be the year that analysts and officials finally stop under-estimating the power of non-state actors.
The Syrian rebel groups have distinct priorities and ideologies. While HTS marched on Damascus, the SDF expelled the Syrian regime from Qamishli and Hasakah. But the so-called SNA, guided by Turkey, instead took aim at the SDF.
The Turkish-Kurdish conflict is playing out in Syria and risks undermining everything that has been achieved since the defeat of ISIS. It could also jeopardize the historic opportunity to forge a new path for Syria. If the peace process in Turkey is successful, then 2025 will be the most peaceful year in Syria since the start of the conflict in 2011. If it fails, it could be the most violent.
Sinem Adar, an associate at the Center for Applied Turkey Studies in the German Institute for International and Security Affairs
The unexpectedly rapid fall of Assad has unleashed a wave of uncertainty and opportunities. Ankara operates on the premise that a friendly government in Damascus and a renewed chance to reshape frontlines east of the Euphrates offer wider space for maneuver. However, Turkey remains careful not to alienate Arab regimes or engage in unilateral moves.
Even so, its geopolitical desires rooted in ideological leanings and historical grievances are beginning to resurface. The extent to which Ankara can balance these competing interests will likely become clearer by 2025.
Turkey’s ruling elites also view Syria’s shifting power dynamics as a chance for regime consolidation in Turkey. Assad’s collapse bolsters the narrative of a strong and assertive Turkey under Erdoğan’s leadership. Furthermore, Ankara sees Syria’s reconstruction as an avenue to reinforce its ties with economic elites, leveraging reconstruction projects for political support.
Lastly, emboldened by recent developments, Turkey’s leadership appears more confident in dealing with the domestic opposition. In 2025, Ankara is likely to intensify efforts to divide, co-opt and suppress dissent at home.
Alexander McKeever, a researcher and author of the This Week in Northern Syria newsletter
The situation in Syria has changed drastically, but Turkey’s policy goals with regard to the northeast remain the same: dismantling the PYD-led Autonomous Administration and the SDF.
Previously, Turkey approached this via military offensives when permitted by Russia and the US, and a drone campaign decapitating SDF leadership and degrading infrastructure when obstructed by the other powers. Since Assad’s fall, the US has so far prevented another Turkish operation, though it’s unclear how this might change once Trump takes office.
Another factor affecting how Turkey pursues its policy will be how HTS-SDF negotiations play out with regard to Damascus establishing hegemony. Turkey will seek to use its significant leverage over HTS as Syria’s primary benefactor to shape constitutional arrangements and prevent PYD-aligned figures from maintaining any semblance of autonomy.
The only development that could change Turkey’s approach to northeastern Syria would be Ankara reaching some sort of agreement with the PKK.
Dareen Khalifa, a senior advisor at the International Crisis Group
Turkey has emerged as the most influential external power broker in Syria, but the stakes and potential payoffs for Ankara are high. Turkey hopes to repatriate the over 3 million Syrian refugees it has been hosting, easing significant domestic political and financial strains. It also sees lucrative opportunities for Turkish companies in rebuilding Syria's devastated infrastructure.
Yet, Ankara's embrace of the new rulers in Damascus may not convince the US and others to lift Western sanctions on Syria or reverse its terrorism designation on the de facto authorities. This could leave Turkish companies in a precarious legal situation.
Furthermore, Ankara has yet to articulate a clear vision that could peacefully address its concerns in northeastern Syria, an area controlled by the Kurdish-led SDF that Ankara views as an extension of its sworn enemy, the PKK. Any further Turkish military incursions into this region to fight the SDF could have catastrophic humanitarian and political consequences, derailing Syria's fragile transition.
Selim Koru, a Turkey analyst and author of the Kültürkampf newsletter
Ankara will focus its energies on foreign policy. I think 2025 is going to be a year when Turkey becomes a much bigger regional player to its north and south.
In the south, Syria has flipped from the “Shia crescent” to a populist Sunni regime. This is one of the major events in the region’s history, and 2025 will be the year when we see a new pattern settling around this fact. Turkey is pushing hard for Rojava to be disbanded, with the American presence there being the only obstacle. I think this is more likely to happen than not.
To the north, Turkey is looking for some kind of a strategic advantage in Ukraine. Erdoğan is hinting that his team is hard at work on that file, and I don’t doubt it. I think that when the Americans and Russians sit down and hammer out a deal, it’s going to be with some form of Turkish mediation, which will mean that Turkey will be part of whatever comes next for Ukraine.
RUSSIA/UKRAINE POLICY
Yörük Işık, a geopolitical analyst based in İstanbul, where he runs the Bosphorus Observer
Russia and Turkey will continue to tip-toe around each other in 2025 across a wide geography.
The relocation of Russian Naval Forces to Benghazi and its Air Force to Al Khadim might create the hottest military contact point in the Moscow-Ankara competition for a leading role in the Maghreb, leaving the door open for a second round of Libyan conflict after Turkey successfully contained Russia in Libya.
However, this time Russia will find it nearly impossible to supply its African presence without Humaymim airbase in Syria. Russia’s ability to operate in Africa will be conditioned on Turkey allowing Russian flights through its airspace.
Hyperinflation in Russia will hit the purchasing power of Russia’s middle class, which will be bad news for Turkish white goods makers and its tourism industry.
The driving force of the relation will be Russia, the world’s most-sanctioned country, offering Turkey discounted commodities. The Turkish president would take advantage of the situation and maintain his role as one of the most important leaders, with the possibility of ending Russian aggression toward Ukraine.
Kerim Has, a Moscow-based political analyst on Russian and Eurasian affairs
Turkey-Russia relations are likely to keep their fragility with their ups-and-downs trajectory in 2025.
It’s obvious that Turkey in 2025 will continue to pursue a more active foreign policy in Russia’s periphery, including Central Asia and in regions where Moscow has been quite operative in the last decade, like Africa.
At least for now, the war in Ukraine has produced concrete results in Turkish-Russian relations: Russia’s growing dependency on Turkey, and at the leadership level, Putin’s increasing dependency on Erdoğan go hand-in-hand and parallel to prolonged military conflict in Ukraine.
The Turkish government takes advantage of these changing dynamics in bilateral ties, and Erdoğan appears to be “a very strategic and effective tool” for his key Western allies like the UK and US to minimize or push back on Russian influence in many crucial regions.
In this regard, Turkey also has the potential to host Ukraine-Russia negotiations again, or a possible Trump-Putin summit in 2025. Though it seems difficult, Erdoğan still maintains the capacity to accomplish such a mission.
ISRAEL/PALESTINE POLICY
Selin Nasi, a visiting fellow at the London School of Economics and Political Science
As a staunch supporter of a two-state solution, Turkey has expressed its willingness to participate in post-war security efforts and the reconstruction of Gaza. While distrust toward Turkey may hinder its security role, Turkey could take part in the reconstruction efforts provided that an understanding is reached between Turkey and Israel. Such an agreement could also potentially ease resistance from Gulf countries toward Turkey’s involvement.
While the Palestinian issue will continue to be a point of contention between Turkey and Israel, their strategic interests align when it comes to limiting Iran’s regional influence. A renewed partnership between Turkey and Israel is possible in the long run if they can agree on the future of the Syrian Kurds.
Disagreements over Kurdish autonomy have been a key source of mistrust toward Israel among the Turkish public. Reports of backstage talks between Turkey and Israel for coordination in Syria indicate that both parties are trying to avoid escalation, even though it may be premature to discuss normalization at this point.
Gallia Lindenstrauss, a senior research fellow at the Tel Aviv-based Institute for National Security Studies
Turkish-Israeli relations are likely to remain highly strained in 2025. The relationship has deteriorated significantly since the Hamas attack on Oct. 7, 2023, which triggered a strong Israeli response in Gaza and drew sharp Turkish criticism.
The downfall of the Assad regime, however, has created a new dynamic in these relations. Turkey's substantial influence over the Syrian rebel forces makes it the dominant player in post-Assad Syria and, in effect, Israel's new neighbor. The likelihood of Turkey training and arming the new Syrian army will probably bring about the presence of numerous Turkish military advisors on Syrian territory. This will require deconfliction talks between Israel and Turkey.
Furthermore, both states must be mindful of each other's critical security concerns within Syria. For Israel, it is paramount to prevent renewed transfer of arms from Iran to Hezbollah via Syria. For Turkey, it is crucial to weaken the military power of the Syrian branch of the PKK. If the countries do not respect each other's concerns, relations may deteriorate further.
Louis Fishman, an assoc. prof. at Brooklyn College who writes on Turkish and Israeli/Palestinian affairs
Following the breakout of the 2023 war in Gaza, through harsh rhetoric and economic embargoes, together with its vocal support for Hamas, Turkey has remained defiant against budging an inch in its non-compromising anti-Israel stance.
This at first placed Turkey behind other regional powers, such as Egypt, Qatar, Saudi Arabia and UAE, pressing for a ceasefire that would lead to an Israeli hostage release. However, following the domino effect of Israel’s war on Hezbollah, which led to the fall of the Assad regime, Turkey is now poised to replace Russia and Iran as the leading power broker in Syria, completely changing the regional game and leaving Israel forced to recognize Turkey's newfound influence.
Parallel to this, Turkey via Qatar, during the last few months, has reignited its regional role as a backroom negotiator between Hamas and Israel. Thus, 2025 will be the year that Israel will need to actively pursue mending ties with Turkey, something that just highlights its lack of understanding of regional changes that have taken place over the last 15 months.
EU POLICY
Samuel Doveri Vesterbye, managing director of the European Neighbourhood Council
The 2025 outlook for EU-Turkey is fragile and very dependent on Donald Trump.
First, Trump doesn’t want to give power to regional initiatives like the EU. He prefers instead to handle relations bilaterally to weaken his counterparts. He will also be deeply uninterested in a powerful Turkey since Russia’s wings have been clipped and Ankara is gaining influence.
Second, Ankara and Berlin’s deep supply chains and economic relations will be seen with caution by Washington. That is because Trump, and Washington generally, see “the new great threat as China”. It’s the opposite for Europe, which sees Russia as the main threat.
Third, existing vulnerabilities will be exploited. France’s geopolitical rivalry with Turkey in the Caucasus and Africa and disagreements over Greek and Cypriot maritime priorities in the Eastern Mediterranean are perfect targets of foreign superpowers to divide Europe. A crisis in any of these areas will exacerbate an already vulnerable Euro-Turkish relationship.
Let’s not forget that a Turkish economy without Germany is weak, and vice versa, Germany can’t build cars without Europe’s biggest back office: Turkey.
US POLICY
Soner Çağaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy
Turkey and Erdoğan will be at center stage, considering the refreshed Erdoğan-Trump relationship during Trump's second term as president. That will include meetings between the two leaders early on, as well as Ankara playing a key role in ending the wars in Syria and Ukraine.
That will, in return, translate into large construction deals, which will benefit Turkey's companies in rebuilding those two countries. And that money, of course, will trickle down.
Perhaps this is going to be the year of economic bounce back in the country, preparing Erdoğan — maybe — to consider early elections, perhaps the following year to win the presidency again, but also allowing him to make changes to the constitution to give himself additional terms as president.
That brings me to my other point. Turkey will pursue what I would call "Convivencia" with Syrian Kurds if the YPG-SDF reconstitutes and rebrands itself first — changing its name and getting rid of Turkish-origin or PKK-based leaders, among other steps. At the home front, this will track into a new “Kurdish opening.”
Özgür Ünlühisarcıklı, Ankara director for the German Marshall Fund
In 2025, Turkey-US relations are likely to improve under the second Trump administration, fueled by Erdoğan and Trump’s strong rapport and shared strategic goals. Turkey could play a key role as a facilitator if Trump pushes for peace talks between Russia and Ukraine.
Additionally, Assad’s recent downfall has bolstered Turkey’s regional influence, making it a more valuable ally for the US in the Middle East.
However, challenges remain. The Gaza crisis could strain ties if Turkey’s vocal support for Palestine clashes with Trump’s unconditional backing of Israel. In Syria, US support for the YPG remains a sticking point, particularly at a time when the new regime in Damascus aims at consolidating its power.
While these issues could continue to strain the relationship, early improvements in bilateral ties seem likely. Whether this positive momentum leads to resolving long-standing disputes remains to be seen.
CHINA POLICY
Çağdaş Üngör, a professor of Political Science and International Relations at Marmara University in İstanbul
Following Trump’s US election victory, 2025 starts with the promise of better Turkish-American relations. In an environment of intense geopolitical conflict between Washington and Beijing, this means smaller maneuvering space for Turkey.
Ankara is keen on developing its ties with China, as shown by its willingness to become a member of China-led organizations such as the Shanghai Cooperation Organization and its efforts to attract Chinese investment. The recently announced BYD investment in Turkey is a clear indication that China also sees merit in this bilateral relationship.
Nevertheless, the Trump government’s China policy may influence Sino-Turkish ties in a negative way throughout 2025. Turkey’s 5G partnership with Huawei, for instance, may become a thorny issue.
Likewise, Trump dislikes BRICS – another organization the Turkish government shows interest in. Overall, I think Turkey’s policy of maintaining “strategic autonomy” between the US and China may face new hurdles in 2025.
AFRICA POLICY
Nebahat Tanrıverdi Yaşar, an independent researcher and policy analyst
After a year of dynamic engagement with Africa, Turkey enters 2025 with a strategic focus on trade, energy, security and diplomacy. Global energy shifts and Africa’s multipolarity present both opportunities and risks, while external competition and regional instability will test Turkey’s adaptability.
Turkey’s mediation facilitated a late 2024 agreement between Somalia and Ethiopia, enhancing Ankara’s diplomatic credentials for the upcoming year, while Pres. Erdoğan’s planned visits in early 2025 highlight Ankara’s focus on East Africa as the year begins.
With hydrocarbon and energy deals across 20 African nations and security-related agreements and arms deals with over 30, Ankara has made swift progress in Africa’s oil, mining and defense sectors.
Yet, Ankara’s ambition to establish itself as a key player in the region’s security and energy landscape faces significant headwinds: domestic economic pressures, Africa’s mounting debt crisis and intensifying competition from China, Europe and Gulf states. Sustaining momentum will require balancing diversified partnerships while navigating structural and geopolitical hurdles.
HUMAN RIGHTS
Oya Özarslan, a lawyer, anti-corruption expert, board member of Transparency International (2017-2023) and founding chair of TI Turkey
According to the Corruption Perception Index published in 2024, Turkey had a sharp decline in corruption perception scores. While in 2013, Turkey was in 53rd place among 180 countries with 50 points, it has now fallen 16 points in 10 years to 115th place in the rankings.
The country has been amongst the sharpest declining countries since 2018, indicating a high risk of public sector corruption. Statistics regarding public tenders also show concerns as open contracting terms only remained at 55 percent. In the meantime, the percentage of tenders made through negotiations, leaving room for discrepancies, reached 43.7, up from 32.8 in one year.
On the other hand, civil society and the media have great concerns about a new draft of the foreign agent bill, which includes discretionary powers to prosecute people. Following autocratic regimes like Russia and Georgia, Turkey is now preparing to enact the foreign agent law, which is expected to result in a clamp down on the society for freedom of speech.
Eren Keskin, a prominent lawyer and human rights activist in Turkey
It appears there will be some significant changes in the Kurdish issue. I think a certain process will accelerate after the meeting with Öcalan. I believe this is connected to developments in Rojava.
While I can't make a complete prediction, if this meeting concludes positively, I think some steps will be taken regarding prisons – if not a general amnesty, then perhaps a partial change in sentencing that could lead to the release of some prisoners, primarily those who are ill.
However, if these meetings don't conclude positively, I think the intense pressure on freedom of organization and expression in Turkey will continue. We will face difficult processes regarding women's rights and LGBTI+ rights and the economic situation will worsen in particular.
I think the foreign agent bill might return to the agenda in 2025. Additionally, another problem is that peaceful solutions are not on the agenda for the working class and unions, so it looks like human rights defenders will have a difficult job in 2025, as well.
ECONOMIC POLICY
İris Cibre, a financial markets executive
The interest rate path in 2025 will lean on cuts. The central bank announced the Monetary Policy Committee will hold eight meetings in 2025, which was perceived as a strategy to earn time and allow for the committee to pass on cuts in four meetings.
Having started with a 250-basis-point cut to 47.5 percent on Dec. 26, I believe that we will reach a policy rate of 30 to 32 percent at the end of 2025.
A sustainable disinflation process seems unlikely without a deep-rooted revision of fiscal policy, a change in public savings policies, a wide-cast taxation policy and strong subsidies in agriculture and animal farming. If the following months show an average of 2.25 percent monthly inflation, we will reach 30.5 percent [annual inflation] by the end of 2025.
However, the drop in interest rates will lead to an outflow of carry trades, followed by a rise in domestic demand. This will all put pressure on exchange rates after H2, which will make it difficult for inflation to drop under 30 percent.
Wolfango Piccoli, co-president and political risk advisory at Teneo
Turkey’s low-income households are expected to bear the primary burden of the disinflation program over the next 12 months, much like in 2024.
Despite a 30 percent increase in the minimum wage, many regular Turkish workers will continue to struggle to make ends meet. The government’s stabilization efforts may encounter social and political resistance in 2025, as the costs of these measures have not been equitably distributed.
Additionally, skepticism surrounding the accuracy of inflation data reported by TurkStat remains unaddressed, further eroding public trust. This lack of credibility has left inflation expectations unanchored.
Amid one of the most severe cost-of-living crises in its history, Turkey’s central bank initiated its easing cycle earlier than anticipated to mitigate growing economic pressures. Pres. Erdoğan recently signaled further interest rate cuts in 2025.
However, the path forward is likely to be challenging. As the fight against inflation enters its most demanding phase, maintaining exchange rate stability will be critical for the success of the disinflation process.
Sinan Ülgen, a senior fellow at Carnegie Europe and director of the İstanbul-based Centre for Economic and Foreign Policy Studies
The main economic theme in 2025 will be the sustainability of the political support for the disinflation program.
For the ongoing adjustment to succeed, interest rate policy should remain strong, coupled with a more ambitious curtailment of government spending. Ultimately, this combination should lead to a depression of domestic demand, creating the necessary economic foundation for a lasting drop in inflation dynamics. And yet, these measures come with a political cost.
As a result, according to many polls, the ruling AK Party has dropped to second place nationally after the main opposition CHP. Even with anticipated elections that are unlikely to be held before mid-2027, the government can afford yet another year of economic tightening despite its likely political cost.
That is, therefore, our base scenario. The Erdoğan factor cannot, however, be totally ruled out. If the political cost of the economic adjustment becomes too visible, the Turkish president can still pull the plug and return to populism well in advance of electoral deadlines.
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