The budget deficit remains in line with the MTP targets
15 December 2025
The central government budget posted a surplus of TRY169.5 billion in November, above the Treasury’s cash balance (TRY56.4 billion), primarily due to seasonally increased corporate tax revenues.
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The trend continued to deteriorate in October
12 December 2025
The current account balance recorded a $0.5 billion surplus in October, slightly below our estimate ($0.8 billion) and slightly above the market estimate (+$0.2 billion). The cumulative current account deficit for the first 10 months of the year reached $14.5 billion, while the 12-month cumulative deficit increased from $20.3 billion to $22.0 billion due to base effects
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Rate cut up to 150 bps amid low November inflation
11 December 2025
The CBRT lowered its policy interest rate by 150 basis points (bps) to 38.0%, in line with rising expectations following the favorable November inflation print. Overnight lending and borrowing rates were also reduced by the same amount, to 41.0% and 36.5% respectively, maintaining the width of the asymmetric interest rate corridor.
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Weak industrial production carried over into the last quarter
10 December 2025
The Industrial Production Index (IPI), adjusted for seasonal and calendar effects (s.a.), declined by 0.8% month-on-month (mom), indicating that the weak outlook continued in October. On an annual basis, the increase slowed to 2.3%.
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The core balance signals strong economic activity
04 December 2025
According to the provisional data for November, foreign trade deficit increased by $0.3 billion year-on-year to $7.8 billion, while the 12-month cumulative foreign trade deficit reached $91.3 billion.
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No improvement in inflation trend excluding food
03 December 2025
Monthly inflation was 0.87%, below our forecast (1.1%) and market expectations (1.3%). This brought annual inflation down 1.8 pp to 31.1%, falling below the midpoint (31.7%) calculated from the forecast band shared by the CBRT in its latest Inflation Report. The more favorable trend in food inflation, particularly in unprocessed food, was the primary reason for the lower-than-anticipated inflation.
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"Slowdown narrative" not confirmed by the data
01 December 2025
In 2025Q3, GDP grew by 3.7% yoy, below market expectations (4.2%) and close to our model estimates (3.8%). Thus, the Turkish economy grew 3.7% yoy over the first three quarters of the year. Seasonally and calendar adjusted (s.a.) GDP grew 1.1% qoq in the third quarter.
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Signals on strengthening demand in manufacturing, services and retail
24 November 2025
November's BTS, CUR, and sectoral confidence indices indicated that weak trend across sectors remained. However, the current state and 3-month ahead expectations for demand indicators (orders, business volume, sales, etc.) pointed to an improving outlook for demand in manufacturing, services, and retail sectors.
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Ambitious targets, hawkish communication, costly macro backdrop
07 November 2025
CBRT kept its interim targets, which it had committed to achieve by separating them from the inflation forecasts in the previous reporting period, unchanged at 16% and 9% for the end of 2026 and 2027, respectively.
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Expectations remained largely unchanged from last month
15 August 2025
The year-end exchange rate expectation rose by 0.24 TL compared to the previous survey period, reaching 44.0. Based on today's value (»40.9), an increase of approximately 7.5% in the exchange rate is expected by the end of the year.
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Demand conditions limit production, while exchange rate increases production costs
30 May 2025
The slowdown in production due to domestic and external demand conditions extended to the 14th month. The decline in May was at the highest rate since October.
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Economic growth regained momentum in the last quarter
28 February 2025
In 2024Q4, GDP grew by 3.0% yoy, in line with our forecast and the average market expectation, and by 1.7% qoq in seasonally and calendar-adjusted terms.
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CBRT revised inflation forecasts upwards but will not respond to the inflationary outlook with a tighter monetary stance
08 November 2024
In the 2024-IV Inflation Report, the CBRT raised its year-end inflation forecasts for 2024, 2025 and 2026 to 44%, 21% and 12%, respectively (Chart 1).
In the previous Inflation Report, the forecasts were 38%, 14% and 9%, respectively. The uncertainty band around the inflation forecasts has been revised to 42%-46% for 2024 and 16%-26% for 2025, while it has been set at 6%-18% for 2026.
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Annual headline inflation increased to 83.45% yoy, with the core C hitting 68.09%
03 October 2022
CPI inflation was below the market expectations in September with 3.08% monthly increase. As a consequence, annual inflation rose from 80.21% to 83.45%, setting another yoy record in the revised series (2003=100).
The continuing upward trend in inflation was mainly driven by the contribution of housing, food, household equipment, restaurants-hotels and transportation. Core-B index also hiked by 2.74% MoM, bringing its annual rate to 74.63%, up from August’s 72.53%.
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CBRT decision: Emphasis on risks on global growth and inflation
23 June 2022
Risks on global growth and already high global inflation continue. The divergence of monetary policy steps and communications of developed countries' central banks are increasing due to their diverse economic Outlook.
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