Southeastern Europe & Mediterranean Emerging Market Economies: Bi-Weekly Report 16 - 29 September 2025

TÜRKIYE
Despite a new bout of political uncertainty, growth in domestic demand rebounded in Q2:25, pushing annual GDP growth up to a 5-quarter high of 4.8%
Amid (cautious) monetary policy easing, GDP growth should maintain quite some steam over the forecast horizon, coming in at c. 3.5%, slightly below its long-term potential 
Worryingly, political risk is set to remain elevated, posing a headwind to economic growth

ROMANIA
Annual GDP growth remained lackluster in H1:25, albeit picking-up (to 1.5% from 0.8% in FY:24, still less than half its long-term potential)
Economic growth cannot but be affected, at least in the short-term, by unwinding of fiscal consolidation efforts, with modest recovery projected in mid-2026 onwards
Risks to GDP growth outlook are tilted to the downside

NORTH MACEDONIA
Strong underlying inflationary pressures leave little room for (further) monetary policy easing in the short-term
Following no progress in 2025, fiscal consolidation should resume in 2026, but at a slow pace, in view of high rigid spending and structural constraints

APPENDIX:
DETAILED MACROECONOMIC DATA
REGIONAL SNAPSHOT:  
        MACROECONOMIC INDICATORS
        FINANCIAL MARKETS