Türkiye’s economic momentum boosts confidence in 2026 targets

Türkiye’s economy has entered the final stretch of 2025 with a series of strong signals that are lifting expectations for 2026, as growth, exports, inflation and financial indicators move in a favorable direction. Economic expansion continued for a 21st consecutive quarter, with GDP growth reaching 3.7% in the third quarter of 2025, while national income climbed to a record $1.54 trillion, underscoring the scale and resilience of the Turkish economy.

Exports and current account balance

External trade performance has been one of the clearest pillars of this momentum. Exports surged 12.8% year-on-year in December to $26.4 billion, marking the highest monthly figure on record. In line with the Medium-Term Program, total exports for 2025 reached $273.4 billion, the highest level in the republic’s history. Supported by rising goods and services exports, the current account deficit remained manageable, while October posted a $457 million surplus. Excluding gold and energy, the surplus exceeded $7 billion, extending a positive trend for four straight months.

Disinflation gains traction

At the same time, the disinflation process continued to deepen. Annual consumer inflation eased to 30.89% in December 2025, the lowest reading in more than four years. Key components showed similar improvement, with services inflation falling below 44% and housing inflation dropping to its weakest level in nearly three years. Basic goods inflation declined to levels last seen five years ago, while clothing and footwear prices remained in single digits, highlighting a broad-based slowdown in price pressures.

Labor market and manufacturing signals

On the employment front, the unemployment rate stood at 8.6% in November, remaining in single digits for more than two and a half years. Manufacturing indicators also pointed to stabilization, as the Türkiye Manufacturing PMI rose for a second consecutive month in December, edging closer to the 50-point threshold that signals expansion and suggesting that operating conditions are no longer deteriorating sharply.

Markets and risk perception improve

Financial markets reflected these trends. Türkiye’s five-year CDS premium fell to nearly 204 basis points, its lowest level since 2018, easing external borrowing costs for both the public and private sectors. The BIST 100 index responded by setting a new record after four months, supported by declining risk premiums and stronger macroeconomic data. Together, these indicators are shaping a more confident outlook for Türkiye as it moves toward its 2026 economic targets.