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The Turkish economy grew by 1.0% q/q in 1Q25, leading to an annual growth rate of 2.0%. Our monthly GDP indicator nowcasts a deceleration to a quarterly growth nearing 0% in 2Q25, which would start improving in 3Q25 with more supportive conditions.

Hard data confirms a robust quarterly GDP growth in 1Q25, similar to the previous quarter (1.7% q/q in 4Q24), driven primarily by domestic demand. Leading indicators signal a broad-based weakening in activity for 2Q25. We maintain our 2025 GDP growth forecast of 3.5% with risks becoming tilted to downside.

High frequency data for 1Q25 point that the q/q growth will likely remain steady as in 4Q24, supported by the domestic demand. Despite the uncertainty on trade wars and recent tightening in financial conditions, we evaluate risks as balanced on our 2025 GDP growth forecast of 3.5%, given the strong buffer of 1Q25 growth.

The Turkish economy grew by 1.7% q/q in 4Q24, close to our expectations, leading to 3.2% y/y growth in 2024. Our monthly GDP nowcast shows a continuation of the recovery trend in 1Q25 with a 1-1.5% q/q growth as flash indicators signal as of February.

Incoming hard data points to a faster recovery in 4Q24 than our previous stagnant growth expectation on quarterly basis. We expect the GDP growth to reach around 3% in 2024 but acknowledge some upside risks recently emerge on our 2025 growth forecast of 2.5%.

Growth outlook remained weak, while the demand indicators point to a slower-than-desired correction. Considering tight financial conditions and the gradual moderation in domestic demand, we expect the economic growth to reach 3.2% in 2024 but downside risks are increasing on our 2.7% growth forecast for 2025.

Domestic demand is driving Colombia's economic recovery, with GDP projected to grow by 2.0% in 2024 and up to 3.5% by 2026. Investment and consumption, particularly in durable goods, will fuel growth, while inflation and interest rates continue to decline.

Observing no clear signs of deceleration, we nowcast a quarterly GDP growth closer to 1.5% as of May. Given the current solid performance and the lagged impact of the expected tighter policies in 2H, we eliminate our previous slight downward bias and now assess the risks on our 2024 GDP growth forecast of 3.5% are balanced.