Turkey will face economic challenges in 2025, Dunya writes. High inflation, external debt, and political instability remain key risks. However, the country has a chance to develop thanks to green energy, digitalization and logistics projects.
Shevket Sayılgan
In this article, on the eve of 2025, I would like to assess the economic risks and opportunities in Turkey and the world.
1. Global economic risks
High inflation and interest rates
They tried to control high inflation in 2024 with the help of disinflationary policies. In this regard, the process of slowing down the global economy has begun, which will continue in 2025. Major central banks, with the US Federal Reserve and the European Central Bank leading the way, did not lower interest rates.
The slowdown of the Chinese economy
The slowdown in China's economic growth has a negative impact on global trade and demand for commodities. This situation could seriously affect Asian economies and the global supply chain.
Fluctuations in energy and commodity markets
Fluctuations in energy prices due to the Russian-Ukrainian conflict will continue in 2025. Europe is especially facing risks in the field of energy security. In addition, tensions in the Middle East could lead to sudden spikes in oil prices.
Competition in the field of technology and artificial intelligence
The rapid development of artificial intelligence and digital technologies is creating a new field of competition between countries. Technological wars between the United States, China and the European Union can affect supply chains and economic stability.
2. Economic risks for Turkey
Exchange rate and external debt
The burden of high external debt poses a serious risk for Turkey due to rising interest rates and the appreciation of the dollar. Exchange rate volatility puts a strain on the financial structure of the private sector.
Inflation and cost of living
Inflation in Turkey is expected to remain in double digits in 2025. Such a situation can reduce the purchasing power of the population and negatively affect economic growth.
Electoral process and uncertainty
Against the backdrop of continuing high political tensions after the 2024 municipal elections in Turkey, uncertainty about economic reforms could undermine investor confidence.
3. Global political risks
The rivalry between the United States and China
The trade war between the United States and China could escalate into a larger geopolitical crisis over Taiwan. This situation increases the security risks in the Asia-Pacific region.
The Russian-Ukrainian conflict
The continued clashes between Russia and Ukraine pose critical risks to Europe's energy security and relations between NATO and Russia.
Escalation in the Middle East
The Israeli-Palestinian conflict and Iran's nuclear program could put the Middle East back at the center of the global agenda in 2025. Instability in the region may trigger an increase in energy prices and a migration crisis.
4. Political risks for Turkey
Internal security
Turkey's internal security and political stability continue to be the most important topics. Cross-border operations and tensions in domestic politics may affect Turkey's regional relations.
Relations with the EU and the USA
Fluctuations in Ankara's relations with the West increase economic and political risks. In particular, uncertainty about the modernization of Turkey's Customs Union with the EU and sanctions may complicate Turkish foreign policy in the new year.
5. Climate change and disaster risks
In 2025, the effects of climate change may become even more noticeable. Global warming and disasters such as droughts and floods threaten both economic and political stability. Turkey faces serious risks in the field of energy transformation and water resources management.
Economic opportunities in Turkey and the world in 2025
Despite the global economic uncertainty, 2025 stands out for the opportunities emerging in the innovation, green energy, digitalization and emerging markets. While Turkey has the potential to benefit from these opportunities due to its geographical location and young population, sustainable development, technological transformation and new trade dynamics are coming to the fore in the world as a whole. Below are the main economic opportunities in 2025.
1. Global economic opportunities
Green energy and sustainable investments
In line with the goals of carbon neutrality, the green transformation is gaining momentum in the world. In particular, the EU's Green Deal program and the energy transformation policy of other major economies are contributing to increased investment in renewable energy.
So, in 2025, the following events can be expected::
— solar, wind and hydrogen energy projects will gain momentum;
— energy storage systems and battery technologies will become important areas of investment;
— Carbon emissions trading and sustainability reporting will create new economic opportunities.
In this process, companies and countries that are leaders in the field of green energy technologies will gain a great advantage in global trade.
Digital economy and artificial intelligence
Rapid progress in technology and artificial intelligence is driving the transformation of the global economy. So, in 2025:
— solutions using artificial intelligence will increase efficiency in industries such as healthcare, finance, agriculture, logistics;
— e-commerce and digital services will provide easy access to new markets;
— blockchain technology will increase transparency and reliability in the logistics and financial sectors.
Especially the leading countries in the field of technology exports and digital services will be able to increase their share in the global economy.
Emerging markets
Population growth and economic growth in the markets of Asia, Africa, and Latin America create new investment opportunities. Important projects will be implemented in these regions, especially in the fields of infrastructure, agriculture, technology, and energy.
2. Economic opportunities for Turkey
Renewable energy and energy transformation
Turkey has great potential in the field of solar and wind energy. In 2025, Turkey will take the following steps::
— increasing the capacity of renewable energy sources will contribute to the national economy by reducing energy imports;
— Investments in energy storage technologies and green hydrogen projects will make it possible to take important steps towards becoming an energy exporter.
Digitalization and the technology sector
Turkey's young and technologically adapted population implies a great advantage for the digital economy. Turkey can follow the following path in the field of software, artificial intelligence and financial technologies:
— Turkey can become a regional center for the export of digital services;
— by supporting local initiatives, it is possible to increase the number of unicorn companies;
— Turkey can continue to grow in the field of e-commerce and online services.
Technologies in the field of agriculture and food
Turkey's geographical location and agricultural production potential make the agricultural sector a strategic advantage. In 2025:
— smart agricultural technologies and sustainable production models can increase food exports;
— due to digitalization and increased productivity in the field of agriculture, it is possible to control price fluctuations in the domestic market.
Logistics and trade corridors
Turkey's strategic location between Asia and Europe contributes to becoming a global logistics hub. In particular:
— expansion of trade through the Middle Corridor can make Turkey an important logistics center;
— investments in new port projects and railways can strengthen the logistics infrastructure.
Diversification and sustainability in tourism
Turkey has the potential to become one of the most important tourist destinations in the world. In 2025:
— diversification can be carried out in such areas as healthcare, culture, ecological and gastronomic tourism;
— Long-term growth can be achieved through the practice of sustainable tourism.
3. Global economic integration and new trade agreements
Closer economic integration of Turkey into global trade is expected in 2025. Free trade agreements, regional cooperation, and multilateral organizations open up opportunities for economic growth.
Turkey can increase its exports by taking steps to modernize its Customs Union with the EU.
New trade agreements with Asia and Africa may be concluded to enter new markets.
Conclusion
The year 2025 promises great potential in terms of technological transformation, investments in sustainable energy, and economic opportunities in emerging markets. Turkey can turn its strategic location and young population into an advantage and make significant strides in the fields of digitalization, energy transformation, agricultural technology and logistics. For countries wishing to gain a competitive advantage in the global economy, innovation, resilience, and adaptation to new trade dynamics will be crucial factors. However, if structural reforms in education, law, and financial policy are not implemented, the chances of success will be lower.
Epilogue: "It is impossible to solve the problem at the same level as it arose. We need to rise above this problem, rising to the next level" (Albert Einstein).
