As global companies explore expansion opportunities, understanding Turkey’s 2025 economic landscape is crucial. With its strategic location, large population, and emerging market status, Turkey offers compelling potential—but not without challenges. Here’s what global employers need to know as they consider hiring, investment, or establishing operations in Turkey.
🇹🇷 1. Moderate Growth in 2025
Turkey’s economy is expected to grow moderately in 2025:
- World Bank forecasts a 3.1% GDP growth for 2025, up from 2.6% earlier in the year
- BBVA Research projects around 3.5% growth, following stronger-than-expected momentum in late 2024
- However, a Reuters poll puts full-year GDP growth closer to 3.0%
This steady, mid-single-digit growth—despite global slowdown—suggests that Turkey remains resilient and can sustain employment expansion and market opportunities.
2. Inflation & Interest Rate Outlook
Inflation and monetary policy have a major impact on employment, salaries, and operational costs:
- BBVA forecasts inflation at 29% year‑end and 20.5% in 2026, with policy rates at 31.5% and 23% respectively
- Mid‑2025 data shows inflation easing—35.4% in May, down from ~48% earlier—with core inflation also cooling
- Central Bank of Türkiye (CBRT) is expected to start easing mid‑2025, cutting rates from the high 40s to around 35% by year‑end
🔍 Employer Implications: Wage demands may be high due to inflation, but rate cuts could ease borrowing costs and stabilize Lira-denominated costs late in the year.
3. Currency and Exchange Rate Trends
Turkey’s Lira has experienced volatility:
- BBVA projects USD/TRY ≈ 42 by end‑2025, marking a slight real appreciation from current levels
- While rate hikes support the Lira, sudden political events—like Mayor İmamoğlu’s arrest—have caused short-term instability
📌 Employer Implications: Companies paying in foreign currency or repatriating profits should consider currency hedging and factoring FX risk into budgeting.
4. Labor Market Conditions & Wages
Turkey’s labor market shows resilience amid economic fluctuation:
- World Bank notes labor force participation at around 60% and unemployment hovering near 8%, though broader underemployment is higher
- Minimum wage rose roughly 30% in 2025 (to ~22,104 TRY/month), easing poverty even as inflation remains elevated
- Employers report strong demand for skilled workers in IT, AI, engineering, manufacturing, and services
💼 Employer Implications: While minimum wage increases raise labor costs, productivity gains in skilled sectors mitigate that. Hybrid and remote policies are also increasingly needed to attract top talent.
5. Foreign Investment & Business Environment
- In 2024, FDI rose to 11.3 billion USD, up ~5.6% year-over-year
- Turkey’s customs union with the EU allows many exports to bypass U.S. tariffs—a potential advantage amid U.S. trade tensions
- Despite political uncertainties, foreign investment in government debt surged—$1.9 billion inflows in early 2025
- The OECD stresses the importance of structural reforms, higher female labor force participation, and innovation for sustained growth .
🌐 Employer Implications: Sustained FDI indicates confidence in Turkey’s position as a manufacturing and service hub. Clear strategies around trade and fiscal policies become central to long-term plans.
6. Risks & Macro Uncertainties
Key uncertainties remain:
- Political instability can impact markets—seen after the arrest of opposition leaders
- Inflation persistence remains a challenge, forcing policy to stay restrictive
- Global trade volatility may be a double-edged sword: structures in Turkey benefit from EU proximity but may still suffer from indirect effects .
✅ Employer Strategy: Incorporate risk strategies, build flexibility into workforce planning, and stay informed on political and economic updates.
7. Strategic Implications for Global Employers
- Hiring Plans & Compensation
- Budget for rising wages and inflation-linked adjustments.
- Consider offering benefits that offset cost-of-living pressures.
- Hiring Models (EOR, Entity Setup)
- For short-term or small teams: EOR solutions offer speed and legal compliance without building an entity.
- For long-term commitment: Establishing a local presence may offer greater control.
- FX & Cost Management
- Consider hedging strategies if revenues or budgets are in foreign currency.
- Leverage low interest rates in later 2025 to optimize financing.
- Talent Retention & Skills
- Invest in training and development, especially in digital, green, and automation sectors.
- Enhance employee value propositions: flexible work policies, health coverage, career progression.
- Market Positioning
- Use Turkey’s strengths—EU access, manufacturing base, skilled workforce—to establish regional hubs.
- Stay agile amid regulatory shifts and trade changes.
8. Sector-Specific Opportunities
- Tech & Digital: Strong demand for developers, AI engineers, and cybersecurity experts
- Manufacturing & Export: Attracting EU supply chains amid rising trade tensions .
- Tourism & Hospitality: Recovery of 62 million tourists in 2024 indicates growth potential
- Renewable Energy & Green Tech: Turkey’s path to net-zero by 2053 fosters investment and new jobs
Takeaways for Global Employers
- Moderate growth (~3–3.5%) signals stable but not explosive opportunity.
- Inflation remains high, but central bank easing may stabilize economic conditions.
- Labor market is dynamic; wage and benefit pressures are balanced by talent needs.
- EOR services offer flexible, low-risk entry, especially for talent acquisition.
- Strategic planning is key—in cost structure, FX risk, compliance, and talent retention.
📈 Need help entering Turkey’s market?
We provide expert EOR solutions, localized market insights, and workforce strategies tailored to the Turkish economy.
Contact us today to build your regional growth with confidence.