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Turkish economic and financials developments 

Short-term inflation forecasts were revised upwards, while interim targets were maintained
14 August 2026

In its third inflation report of the year, the CBRT maintained its interim targets but updated year-end inflation forecast from 26% to 28%. This brings the total upward revision for the end of 2026 in the last two reports to 10 percentage points. The year-end targets for 2027 and 2028 remained unchanged at 15% and 9%, respectively.

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Positive surprise from current account, significant revision in net errors and omissions item
13 August 2026

In June, the current account deficit stood at $4.19 billion, coming in below both our forecast ($5.2 billion) and the market consensus ($5.0 billion).

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The headline shows a positive outlook for second-quarter growth, but the overall trend remains weak
10 August 2026

In June, while the Production Index (IPI) showed a strong year-on-year increase due to calendar effects, as highlighted in our note last month, it remained flat on a monthly basis despite strong growth in other transport equipment production. The IPI increased by 0.1% month-on-month on a seasonally adjusted (s.a.) basis and by 14.4% year-on-year.

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Improvement in foreign trade balance again
03 August 2026

According to the Ministry of Trade’s provisional data, the foreign trade deficit widened by $0.9 billion year-on-year in July, reaching $7.4 billion.

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Geopolitical tensions delay the expected improvement in the inflation trend
03 August 2026

Consumer prices increased by 1.78% month-on-month (mom) in July, coming in below our expectation (1.98%). Accordingly, annual inflation declined by 0.35 percentage points compared to June, falling to 31.75%.

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Domestic demand weakened, while external demand improved for manufacturing in July
27 July 2026

Following a two-month recovery, seasonally-adjusted (s.a.) RSCI fell by 0.8 points to 101.2 in July, dropping 2.3 points below its long-term average. A marked deterioration in investment tendency drove this monthly decline. Conversely, an increase was observed in export orders for the coming three months.

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Reescalation of geopolitical tensions limit the policy space
23 July 2026

The CBRT kept the policy rate unchanged at 37.0%, in line with the updated expectations following the reescalation of geopolitical tensions in recent days.

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The budget balance continued to improve in the first half of the year
16 July 2026

The central government budget recorded a surplus of TRY 114.2 billion in June, exceeding the Treasury cash balance surplus of TRY 50.8 billion, while the primary surplus reached TRY 315.8 billion.

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Significant improvement in external balance despite geopolitics
04 June 2026

According to the Ministry of Trade’s provisional data, in May exports decreased by 9.3% year-on-year to $22.5 billion, while imports decreased by 10.7% year-on-year to $28.1 billion.

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Growth driven by consumption and services, but weighed down by exports and industry
01 June 2026

GDP grew by 2.5% year-on-year in the first quarter, close to both the market expectation (2.7%) and our model forecast (2.3%).

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