There is no deterioration in Türkiye’s disinflation path but rather a slowdown mainly due to food prices and seasonal effects, Treasury and Finance Minister Mehmet Şimşek said Friday.

The downward trend continued in January as annual inflation eased to 30.7%, but a monthly spike of nearly 5% in consumer prices triggered market doubts about whether the course seen throughout 2025 is on track.

“Türkiye can speak of a slowdown in disinflation due to transitory effects, but not of any deterioration,” Şimşek told an interview with private broadcaster NTV.

The higher-than-expected monthly increase in January was driven by new-year adjustments and food and drink prices.

“It would be a very wrong assessment to say the disinflation program is stalled just by looking at the first few months,” Şimşek said.

Price increases are expected to remain lofty near 3% this month, and policymakers said a limited annual increase in headline inflation may be seen, with food prices again weighing.

But they expect the main trend to approach the lower November-December levels from March onward.

Most pressing challenge

According to Şimşek, the cost of living remains Türkiye’s most pressing macroeconomic challenge, reiterating the government’s commitment to implementing its economic program.

“Currently, the most important imbalance is inflation; we continue to implement the program with great determination,” he noted.

“We have two main priorities: structural transformation and the fight against inflation.”

As annual inflation slowed from levels above 40% at the beginning of last year, the Central Bank of the Republic of Türkiye (CBRT) slashed its key rate by 900 basis points in five steps since last summer.

But its last move – a smaller-than-expected 100-basis point cut to 37% in January – and the monthly spike in consumer prices raised some expectations the bank could slow its more than year-long easing cycle.

CBRT Governor Fatih Karahan struck a confident tone, however, saying last week that while the policy stance needed to remain tight, the inflation outlook is “not that negative,” which analysts took as a signal that there were more rate cuts ahead.

But Karahan said the threshold to increase the size of rate cuts from 100 basis points is “a bit high” and cautioned that more easing was not a given.

The CBRT nudged up its year-end inflation forecast range to 15%-21% and maintained its interim 16% target. The increase from the earlier 13%-19% range accounted for a change in data calculations and energy and food prices, Karahan said.

The bank also left its end-2027 interim inflation target at 9%, in a forecast range of 6%-12%, and it targets 8% by end-2028.

Officials, including Şimşek, have repeatedly said they would want to see inflation dip below 20s by the end of this year. Market participants surveyed by the central bank last month forecast it at 23.23%.

On Friday, Şimşek addressed concerns about price rigidity in the services sector, saying that the issue is not structural inflexibility but rather a process that takes time to adjust.

Current account gap under control

He said, among others, there has been no change in supportive fiscal, monetary and income policies, adding that public debt management has improved and the structure of borrowing is being strengthened.

Şimşek said Türkiye has largely brought its current account deficit under control and placed it on a sustainable trajectory. However, he cautioned, achieving a sustained current account surplus will take more time.

He added that once uncertainty related to Iran eases, energy prices are likely to resume a downward trend, which would positively affect Türkiye’s current account balance, disinflation process and growth outlook.

Oil prices traded near six-month highs on Friday, poised for their first weekly gain in three weeks on growing concern over potential conflict after U.S. President Donald Trump said “really bad things” would happen if Iran does not agree to a nuclear deal in a matter of days.

The major oil producer lies opposite the oil-rich Arabian Peninsula across the Strait of Hormuz, through which about 20% of global oil supply passes. Conflict in the area could limit oil entering the global market and push up prices.

Strong investor interest

Şimşek said international investor interest in Türkiye remains strong, highlighting increased policy consistency and predictability.

He added that he plans to visit Japan in March to meet real‑sector business groups to discuss possible direct investment in Türkiye.

According to Şimşek, the private sector will be able to access more and cheaper financing after 2026.

He also stated that there is no new tax agenda this year regarding corporate tax, income tax, or value-added tax.

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From a 13-month contract at the International Energy Agency (IEA) in 1995 to leading the institution that world leaders now consult for guidance, Fatih Birol plays a dominant role in shaping global energy politics amid rising insecurity, geopolitical fragmentation and the push toward a clean transition.

After working for 20 years in different positions at the IEA, the Turkish energy economist has been heading the institution since 2015 as the executive director. The Paris-based organization’s forecasts and scenarios influence investment decisions worth billions, and its warnings can unsettle governments.

Born in Ankara in 1958 to a military doctor and a housewife, Birol describes a childhood marked less by ambition than by family cohesion.

His father, who came from humble beginnings, worked multiple jobs to support the household. “We were known as the happy family,” Birol told Anadolu Agency (AA). “Having your parents beside you gives a child confidence.” He spent his childhood between family, school and playing football in the streets.

Birol was, by his own account, an average student. At the Istanbul Technical University, where he studied electrical engineering despite his father’s wish that he become a doctor, he says he was “almost average.” The lesson he draws today is simple: academic brilliance is not destiny. “If you love your work, you can succeed.”

For a time, his ambitions lay far from energy economics. He flirted seriously with cinema, making short films and working as an assistant director before moving to Vienna to attend the Film Academy. But then reality intervened. To make ends meet, he shoveled snow and took manual jobs. “I realized that life was not as easy as it seemed – especially financially,” he said.

A scholarship from the Austrian government redirected him toward energy economics. Birol received an MSc and a Ph.D. in energy economics from the Technical University of Vienna.

31 years at IEA

An oil analyst position at OPEC followed. The pay was good and the contract was permanent. Yet something felt narrow. “I wanted to work on global issues, especially those affecting developing countries,” he said. So, he made a decision that still defines his narrative: left a lifetime contract for a 13-month position at the IEA.

“I chose the 13-month contract,” he said. “And this year marks my 31st at the IEA.”

He joined the IEA at an entry-level position in 1995. That same year, an election for executive director of the institution was underway. Birol recalled what he thought back at the time: why not me as the head of the IEA, one day?

Over the years, he rose to chief economist and in 2015, became the agency’s first internal candidate to be elected executive director by unanimous vote. He was reelected for a third term in 2022.

On the day he was elected in 2015, he asked for a moment to call home. Birol wanted to call his father, but could not as he was ill. He spoke instead to his mother, who recently turned 90 and whom he still calls every morning, no matter where he is.

Despite international honors – including France’s the Legion of Honour, the country’s highest distinction and the Japanese Emperor’s Order of the Rising Sun – he said the greatest happiness lies in telling his mother about them. “Making her happy is what matters the most.”

Energy, geopolitics

Birol’s tenure as the head of the IEA has coincided with a decade in which energy security, climate policy and great-power rivalry have converged. He meets world leaders regularly and shares the IEA’s forecasts with them.

He speaks often about data. The IEA’s authority, he noted, rests on numbers rather than ideology. “We always, always look at the data,” he said. “Not emotions. Not politics, not ideology but data.”

Beyond energy, Birol’s long-standing passion remains for Galatasaray, a football club in Istanbul. He tries to schedule around match fixtures and even watches games at 3 a.m. if necessary, especially when he travels. “If I don’t watch, I can’t sleep,” he admitted.

His mornings begin early as he rarely sleeps late and always with Turkish tea. “I cannot live without Rize tea,” he said, referring to the black tea produced in a province in the Black Sea region of Türkiye.

A routine day of his mostly continues with back-to-back meetings.

“I have been in this sector for very long years but have not seen a period when energy and geopolitics were so deeply intertwined. Geopolitics casts a dark shadow over energy,” he said.

It is his philosophy of hard work that has carried him from snow-covered streets in Vienna to the inner circle of global energy diplomacy – proof that a 13-month contract can sometimes reshape an institution, and perhaps a global industry.

At 67, with more than four decades in the field, Birol also offered younger professionals a measured credo: align passion with economic stability. Passion alone can be precarious; money alone can be empty. The two together, he believes, sustain a career.

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The European Central Bank (ECB) announced on Thursday it had fined JPMorgan a total of 12.2 million euros ($14.4 million) for misreporting risk, the largest fine so far levied by the Frankfurt institution.

The U.S. investment bank has been found that it had misclassified some transactions and excluded others from its calculations between 2019 and 2024, the ECB said.

“This occurred because, for 15 consecutive quarters, the bank misclassified corporate exposures and applied a lower risk-weight for credit risk to them than what banking rules prescribe,” it said in a statement.

It said JPMorgan had reported that its capital buffers were bigger than they actually were.

“The bank committed both breaches with serious negligence, driven by evident deficiencies in its internal processes,” the ECB said.

“The bank’s internal controls did not detect the breaches in a timely manner,” it added.

Banks are required to keep a certain amount of cash or highly liquid assets on their books in proportion to the amount of risky holdings they have.

Artificially lowering the proportion of risky assets on its books would have freed up cash for JPMorgan to invest in other areas.

The ECB last week fined French bank Credit Agricole 7.55 million euros for being too slow to evaluate its climate change-related risk in response to a request from the central bank.

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The former governors of the Spanish and Dutch central banks are seen as the front-runners to replace Christine Lagarde at the helm of ​the European Central Bank (ECB), likely in a broader political deal that could see both of them end up with a major job.

Lagarde plans to leave her position before the end of her term to give outgoing French President ⁠Emmanuel Macron a say in picking her successor before elections that could ⁠be won by the Eurosceptic far-right, the Financial Times said on Wednesday.

Economists said an early Lagarde exit boosted the chances of European leaders agreeing to fill in a package all three ECB Executive Board seats that are set to come up for grabs next year: Lagarde’s own, ​that of chief economist Philip Lane in May 2027 and Isabel Schnabel’s at the end of 2027.

Former ​Dutch ⁠governor Klaas Knot and his Spanish colleague Pablo Hernandez de Cos were seen by economists as the leading candidates for two of those seats, meaning whoever did not get the top job could get another.

Both are perceived as experienced central bankers who would guard the ECB from political pressure – a hot topic after U.S. President Donald Trump’s vocal demands on the Federal Reserve (Fed) – and not deliver major surprises when setting interest rates, which have now been on hold for eight months.

“It’s certain that these decisions will be linked to each other and put in some compromise deal,” Piet Haines Christiansen, chief strategist at Danske Bank, said. “They’re close in time and it’s the same pool of candidates.”

Hawks and doves

As national central bank governors, the two men sat on the ECB’s rate-setting Governing Council.

Knot was a policy hawk who often dissented with the ECB’s brand of easy-money policy under former chief Mario Draghi but mellowed towards the end of his term, which ran out last June.

De Cos, a dove who showed he was able to change his mind when inflation surged in 2022, took a job as the ⁠head ⁠of the Bank for International Settlements only last summer.

That could give Knot an advantage if Lagarde’s job were to come up very soon.

“It could boost Knot’s chances, which is a good outcome because he has credibility and a good reputation as a pragmatic hawk,” Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, said.

He added De Cos may come across as “a little too dovish”, referring to lower interest rates that favor indebted southern European countries such as Italy and Greece over those with lower debt in the north, such as Germany and the Netherlands.

On the other hand, Nomura’s economist Andrzej Szczepaniak noted Spain had never provided an ECB President, unlike the Netherlands, and that EU leaders have just chosen Croatia’s central banker Boris Vujcic, a policy hawk, as the central bank’s vice-president – both factors that would help de Cos.

Germans want top job

For Germany, Bundesbank head Joachim Nagel has shown interest ⁠in becoming the euro zone’s top central banker, as has existing ECB board member Schnabel who may, however, face legal hurdles remaining on the Executive Board as its terms are not renewable.

Europe’s biggest economy, which hosts the ECB headquarters in Frankfurt, has never held the presidency.

Economists agreed that all the candidates were competent and would ensure continuity at an institution which prides ​itself on being impermeable to government pressure when it sets rates.

This brand of central bank independence is coming under threat in the United States, where Trump ​is trying to exert greater control over the Fed, and potentially in Britain, where the right-wing Reform U.K. party has floated changes to the Bank of England and budget office.

“Everyone wants to keep the ECB in stable hands and they want the person who is ECB president to ⁠have strong market credibility,” Rebecca ‌Christie, a senior ‌fellow at Bruegel, said. “All the top candidates right now have that”

Only last week, French central bank governor Francois Villeroy ⁠de Galhau resigned, meaning Macron will get to appoint his successor too before the spring 2027 ‌presidential election.

Wildcard candidates

Equally, all observers cautioned that euro zone governments, which choose the ECB’s president before European Parliament ratifies it, could come up with a surprise name – as Lagarde herself was at the ​time of her nomination.

The appointment is normally part of ⁠a broader negotiation that also involves the job of President of the European Commission. Last time, this went to Germany’s ⁠Ursula von der Leyen, freeing up France to secure the top ECB job.

An early Lagarde departure might, however, decouple the positions, according to Spyros Andreoupoulos, founder ⁠of the Thin Ice Macroeconomics consultancy, given ​that von der Leyen’s term runs until 2029.

“It is really too early in the process to have strong convictions on the identity of the next President,” Dutch bank ABN-Amro said in a note to clients. “There may well be some politics in the decision, which opens the door to new candidates.”

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China sees an opening to turn U.S. President Donald Trump’s tariffs to its advantage by reshaping global trade in ways that would insulate its $19 trillion economy from U.S. pressure far into the future. Beijing is exploiting the uncertainty created by Trump to try ​to stitch China’s vast manufacturing base into the world’s biggest economic blocs, including the European Union, Gulf States and a trans-Pacific trade pact, a Reuters examination found. The push involves accelerating efforts to clinch some 20 trade deals in total, many years in the making, despite widespread concerns about China’s overproduction, uneven market access and soft domestic demand.

A Reuters review of 100 Chinese-language ⁠articles by state-backed trade scholars written since 2017 reveals a systematic push by China’s policy advisers to reverse-engineer U.S. trade policy ⁠and neutralize Washington’s containment strategy. China is now putting that blueprint into action. The deal reached with Canada during Prime Minister Mark Carney’s January visit to Beijing – which slashes tariffs on Chinese electric vehicles – was the first of many aimed at breaking U.S. leverage, according to interviews with 10 people, including Chinese officials and trade diplomats.

“Don’t interrupt your opponent when he is making a mistake,” said one Chinese official of Trump’s disruptive trade agenda.

The review, drawn from over ​2,000 trade-strategy papers endorsed by the Chinese Academy of Social Sciences (CASS) and Peking University, which advise top leaders, shows policy insiders broadly accept that painful structural change is a price ​worth paying ⁠for China’s long-term dominance of global commerce. The papers’ contents are reported here for the first time.

If successful, Beijing could upend more than a decade of U.S. trade policy by placing itself at the heart of a new, China-shaped multilateral order, two Western diplomats said.

“The Chinese have a golden opportunity now,” said Alicia Garcia Herrero, senior fellow at the Bruegel think tank.

China’s commerce ministry didn’t respond to a request for comment about Beijing’s strategy.

Asked about China’s approach, a U.S. official told Reuters it was no surprise that countries with large trade surpluses sought to maintain globalization.

“President Trump is fixing the problems globalization caused for the United States while other countries are trying to double down on globalization as free market access to the United States goes away,” the official said.

BUILDING BLOCS

Building blocs

The shift in China’s tone reflects its calculations. A year ago, Beijing was invoking Mao Zedong and its ability to fend off the West in the Korean War with martial propaganda.

Now, as China prepares to welcome Trump in April, its diplomats are touring the world urging trading partners to join it in defending multilateralism and open trade. In January, China dispatched its top diplomat to tiny Lesotho – which Trump initially hit with a 50% tariff – to pledge development cooperation. On Saturday, state media said China would implement zero tariffs on imports from 53 African countries. Meanwhile, China is pitching AI-powered customs systems to neighbors and working to retool digital infrastructure that underpin commerce.

The moves underline a goal identified in the policy papers: to embed China so deeply in global trade that partners can’t afford to decouple under U.S. pressure.

“In countering U.S. strategic competition with China, ‘anti-decoupling’ should become China’s primary focus,” wrote Ni Feng, fellow at CASS’s Institute of American Studies, in 2024.

Chinese officials are now working to fast-track stalled trade talks. Since 2017, China ⁠has been ⁠negotiating with countries including Honduras, Panama, Peru, South Korea and Switzerland.

“We are willing to negotiate bilateral and regional trade and investment agreements with interested countries and regions,” Commerce Ministry spokesperson He Yongqian told Reuters during Carney’s visit, without elaborating. China’s Foreign Minister Wang Yi surprised European negotiators in November by raising the prospect of a free-trade agreement with Brussels during talks with his Estonian counterpart. A month later, Wang pressed the Gulf Cooperation Council (GCC) to conclude long-running talks on a free-trade agreement. In January, British Prime Minister Keir Starmer agreed with Chinese leader Xi Jinping to launch a feasibility study into a trade-in-services agreement that could reduce barriers for British firms. German Chancellor Friedrich Merz has said he will seek “strategic partnerships” with China during a trip next week.

China’s commerce minister Wang Wentao has made joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) a priority. The pact has its roots in the U.S.-backed Trans-Pacific Partnership, developed in part to counter China before Washington withdrew in 2017.

But China’s huge trade surplus complicates the pitch. Some member countries worry Chinese manufacturers may use improved market access to funnel excess low-cost goods abroad, while China’s domestic demand remains sluggish.

Wendy Cutler, chief negotiator during the Obama administration for the Trans-Pacific Partnership, acknowledged the window for Beijing to champion trade and multilateralism but said China needed to go beyond talk.

“And with its huge trade imbalances, as well as some of the coercive measures it’s now taking against countries like Japan, it’s hard to see how they’re walking the walk,” Cutler told Reuters.

A senior ⁠European trade diplomat dismissed Beijing’s overtures as “pure Chinese propaganda,” saying Brussels had no plans for a trade deal. Chinese advisers are undeterred. Speaking to Reuters, one noted the EU and China had negotiated a landmark 2020 investment deal during Trump’s first term. The deal, however, was frozen in 2021 before it could take effect amid a dispute over human-rights sanctions.

Lessons learned

Some Chinese advisers contend in the papers that Beijing should study how Washington has “weaponized” global institutions to contain China, and exploit openings created by Trump’s willingness to abandon or sideline multilateral bodies such as the World Trade Organization.

Others argue Beijing should focus on influencing ​global standards in fields such as intellectual property through initiatives like Xi’s Belt and Road program and China’s membership of the Regional Comprehensive Economic Partnership, which covers about 30% of global GDP.

China is now applying those insights. Its recently upgraded deal with Southeast Asian ​states, for example, focuses on AI-driven and digital trade, where China hopes to secure a first-mover advantage.

Indeed, China’s vision for customs processing is evident at its “Friendship Port” on the Vietnamese border, where state media says home-grown AI solutions have slashed waiting times by 20%, enabling faster deliveries. Reuters couldn’t independently verify the claim.

Trillion-dollar surplus

The risks that China’s $1.2 trillion trade surplus poses to trading partners’ manufacturing sectors are hard to overlook, however. Pascal Lamy, former WTO director-general and EU trade commissioner, said Chinese firms ⁠are sending more goods to Europe than ‌the bloc can absorb.

“It’s a ‌mystery how, given the nature of the regime, given the sort of collective cleverness, how is it that they have not succeeded in rebalancing their economic model?” he ⁠said. Not everyone sees closer ties with China as the easiest way to curb reliance on the U.S.

Stephen Nagy, China project lead at the Macdonald-Laurier Institute in ‌Ottawa, said Carney’s tariff-cutting agreement with Xi appears designed to build leverage before talks over the U.S.-Mexico-Canada (USMCA) trade deal.

“I think his bet is wrong,” he added, predicting that Trump wouldn’t be swayed. Carney has said Canada respects its USMCA commitment not to pursue free-trade deals with non-market economies. His office didn’t respond to a request for comment. Mexico, ​for its part, is wary of endangering U.S. market access by moving too close ⁠to China.

“We see no need for a free-trade agreement with China right now,” said a Mexican trade official. “We are already in the CPTPP and have 60% of world GDP covered.”

Beijing’s trade ⁠partners really need China to revive its consumption, said Fred Neumann, chief economist for Asia Pacific at HSBC. Wang, China’s commerce minister, has said growing imports is a priority as Beijing prepares to launch its next five-year plan in March, in line with ⁠a commitment to raise consumption’s share of GDP. But rebalancing is a ​long-term project. Trump has three years left in office, and the next administration could revert to building coalitions to contain China.

China must “study in depth the logic of U.S. actions within international institutions and the possible next steps it may take to better respond to increasingly fierce strategic offensives in the future,” Zhao Pu, then at Renmin University and now a researcher at CASS’s Institute of American Studies, wrote in 2023.

Deutsche Bahn, Germany’s state-owned national rail operator, said Thursday it would cut about 6,000 jobs at its cargo subsidiary in a bid to boost profitability and reduce dependence on government funds.

“The current restructuring plan envisages a reduction of approximately 6,000 jobs at DB Cargo,” Deutsche Bahn said in a blog post.

“The plan is to implement this in a socially responsible manner.”

Loss-making DB Cargo is facing an EU investigation under state aid rules, and an official decision is due in October.

Cutting 6,000 jobs – about half the firm’s workforce – would help the cargo division stand on its own two feet, Deutsche Bahn said.

“The goal is to align DB Cargo with European growth markets, streamline structures and thus make it sustainably profitable,” it said.

“This will enable the company to comply with the conditions of an EU competition procedure.”

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