OECD cuts Turkish economic growth forecast to lowest rate since 2020 amid Iran war, rising prices

The Organization for Economic Co-operation and Development (OECD) has lowered its forecast for Turkey's economic growth in 2026 to 2.7%, marking the country's lowest rate since 2020. The organization cited the economic impact of the war in Iran, along with rising energy and fertilizer prices, as the main reasons for the downgrade. The 2027 growth forecast has also been adjusted to 3.6%.

Despite these challenges, the OECD expects Turkey to continue its disinflation process, with inflation projected to decrease to 31.5% in 2026 and 24.7% in 2027. Monetary policy easing in emerging economies such as Turkey and Brazil is anticipated to bolster economic growth.

On a global scale, the OECD raised its 2026 economic growth forecast to 2.9%, up from its June projection by 0.1 percentage points. This adjustment comes after the global economy expanded by 3.4% in 2025. Although geopolitical risks in the Middle East have slowed growth in the first half of the year, many economies, including the United States and China, have shown resilience.

India is expected to lead global growth in 2026, with a projected 7.8% increase, followed by Indonesia at 5.2%. Conversely, Saudi Arabia is forecast to experience the steepest decline, shrinking by 1.8% due to decreased oil production and exports amidst the Middle East conflict.