Economy
Türkiye’s construction output hit peak in December 2025
Output in Türkiye’s construction sector surged 7.5% on an annual basis as of December last year, and the construction index saw its record high, according to data from the country’s statistical office compiled by Anadolu Agency (AA) on Monday.
Türkiye’s construction output index, without calendar effects, rose to its highest at 151.2 points in December 2025, the data showed.
The index reached 150.4 points when adjusted for calendar effects, the highest since January 2022, when the data began to be collected, up 7.5%.
The index, adjusted for both calendar and season effects, totaled 129.1 points at the same time.
Meanwhile, all sub-sector indices of the construction production index in December 2025 reached peak highs.
The building construction index rose 8.4%, the civil engineering index 5.8%, and the specialized construction activities index 5.5% year-over-year.
Construction in 2025 offsets 2024’s slowdown
Ali Hepşen, a professor of business administration at Istanbul University, told AA that the country’s construction production saw volatility for a long time, especially due to difficulties in financing, which suppressed production in 2024.
“However, reaching a peak level like 150.4 points is important – the acceleration on construction sites has already been felt in the field since the second half of last year, and the data reflects that,” he said.
He noted that the 8.4% rise in the building construction index reflects that housing remains the sector’s driver, while the rise in non-building construction, which Turkish Statistical Institute (TurkStat) calls the civil engineering index in its data, reflects the support from public investments. Meanwhile, specialized construction activities indicate that “the supply chain is working.”
He said these developments point to a “normalization rather than a new leap.”
“The slowdown in 2024 was offset in 2025,” he said. “The relative decrease in cost uncertainty accelerated unfinished projects.”
“However, the data alone does not indicate demand health or predictability since production and financial resilience are not the same – it’s necessary to make this distinction,” he added.
Hepşen said that extending this momentum into 2026 “would not be easy,” and that the rise last year was led by the completion of delayed production, so the continuation of this momentum depends on the start of new projects, which require financing.
He mentioned that contractors are more selective than before when it comes to starting new projects due to slow sales in certain price segments, but “there is no scenario that could completely slow down the sector.”
Urban transformation, earthquake-related projects
“Investments in earthquake-prone regions, urban transformation, and public projects may continue this year, but I don’t expect the same high momentum as last year, a more limited and balanced increase is the likely outcome this year, yet the peak of last year is still very important,” he said.
“The sector likes confidence, so when the index rises, suppliers relax, and banks become less distant, but the volume growth alone doesn’t measure success, as sustainability will be determined by financing conditions and demand levels,” he added.
Mustafa Ekiz, head of Turkish construction sector service provider Real Estate and Construction Platform, said that the rise in the index shows the sector “has once again assumed its role as the driver of the economy.”
“The rise shows that the housing demand is strong,” he said, noting that the construction production activity will continue into this year, “but the growth is expected to progress more steadily.”
“Access to financing, land costs and credit conditions will determine the pace of the sector this year,” he added.
Ekiz said the sector creates employment and stimulates related sectors, while shaping the future of cities.
“Planned production, appropriate financing models, and a quality urbanization approach are needed for sustainable growth,” he said.
Ukraine will require about $588 billion to rebuild after nearly four years of destruction caused by Russia’s invasion, an amount nearly three times the country’s annual economic output, according to a joint assessment released Monday by the World Bank and partner institutions.
The estimated total is 12% higher than the amount given last year, amid a winter of devastating Russian attacks on Ukrainian energy infrastructure that left millions of people without heating and power.
Four years of war have decimated Ukraine’s economy, reduced entire towns and cities to rubble and forced millions to flee their homes.
Kyiv’s Western allies have pledged hundreds of billions of dollars in aid to Ukraine since Russia invaded in February 2022, but Kyiv uses most of it for the war effort and to keep its economy afloat.
“Recovery and reconstruction needs continue to grow and are now estimated at US$587.7 billion over a 10-year horizon, equivalent to almost three times Ukraine’s 2025 GDP,” the report published jointly by the World Bank, Ukrainian government, United Nations and European Commission said.
The figure was calculated based on an assessment of damage caused up to Dec. 31, 2025.
Since then, Russia has launched more devastating attacks on Ukraine’s energy grid, including waves of missile and drone strikes that have completely destroyed some power plants.
More than one in seven homes in Ukraine have been damaged or destroyed as a result of the war, the report said.
Reconstruction costs were highest in the transport sector, at an estimated $96 billion, followed by the energy and housing sectors at around $90 billion each.
Clearing debris and “explosives hazard management”, essentially de-mining efforts, will require $28 billion.
The frontline Donetsk and Kharkiv regions will need the most investment, while the capital Kyiv will require more than $15 billion to recover, the report showed.
Ukraine’s Western allies have allocated more than $400 billion in financial, military and humanitarian assistance to Ukraine since Russia’s invasion, according to data from the Germany-based Kiel Institute.
A planned EU loan of 90 billion euros ($106 billion) will mostly go towards covering Ukraine’s military expenses, with the rest earmarked for general budget support, Brussels said in January.
Türkiye is planning to establish a mining exchange aimed at expanding financing options and enhancing price transparency in the sector, the head of the country’s miners’ association said, according to remarks published on Monday.
Mehmet Yılmaz, chairperson of the Turkish Miners Association (TMD), said regulatory approval is expected, and the platform is planned to launch in 2026.
Speaking to journalists in Ankara, Yılmaz said the plan, included in Türkiye’s 12th Development Plan, would help create reference prices for strategic minerals such as gold, copper, boron and rare earth elements, making prices more transparent and traceable.
The 12th Development Plan, the second drawn up under Türkiye’s presidential system, spans the years 2024-2028.
The exchange is planned to be based at the Istanbul Financial Center (IFC). An application has been submitted by the Energy Exchange Istanbul (EXIST) to the Capital Markets Board of Türkiye (CMB), Yılmaz said.
“The mining exchange aims to create a more predictable market depth for producers and investors, while providing a lower-risk trading environment,” he said.
Gold at $5,000 seen as ‘new normal’
Also, Yılmaz said gold prices around $5,000 per ounce were becoming “a new normal,” noting that higher prices pose a challenge for importing countries like Türkiye.
“Based on 2025 data, every $100-per-ounce increase in gold prices has an approximately $400 million negative impact on Türkiye’s current account balance,” he said.
According to Yılmaz, Türkiye’s gold production fell to 28.4 tons by the end of 2025, about half of the sector’s target and the lowest level in five years, while total gold imports reached 126.3 tonnes.
At the same time, Yılmaz said silver imports nearly doubled to 860 tons last year, driven by strong industrial and investment demand, particularly from the solar and electronics sectors.
Mining exports rise
Türkiye’s mining exports rose 3.4% last year to $6.2 billion, he said.
Yilmaz said Türkiye expanded overseas through government-to-government agreements in 2025, signing deals with Niger, Sudan, Somalia and Uzbekistan.
He also pointed to closer ties with Canada, saying Türkiye would pursue strong cooperation on mining technologies and financing, supported by the planned mining exchange.
“Mining accounts for about 1% of GDP, but exports exceed $6 billion and the potential runs into trillions of dollars,” he said and added: “After agriculture, mining is Türkiye’s second most strategic sector.”
The European Commission demanded that the United States stick to the terms of an EU-U.S. trade deal agreed last year, after the U.S. Supreme Court struck down President Donald Trump’s global tariffs and he responded with new levies across the board. The EU also considers freezing the deal, the reports said on Monday.
The commission, which negotiates trade policy on behalf of the 27 EU member states, said Washington must provide “full clarity” on the steps it intends to take following the court ruling.
After the court struck down Trump’s global tariffs on Friday, the U.S. president announced temporary, across-the-board tariffs of 10%, which he then hiked to 15% just a day later.
“The current situation is not conducive to delivering ‘fair, balanced, and mutually beneficial’ transatlantic trade and investment, as agreed to by both sides” in the joint statement setting out the terms of last year’s trade agreement, the Commission said on Sunday.
“A deal is a deal.”
The comments were far more strongly worded than the commission’s initial response on Friday, which had said only that it was studying the outcome of the Supreme Court decision and keeping in contact with the U.S. administration.
Last year’s trade deal set a 15% U.S. tariff rate for most EU goods, apart from those covered by other sectoral tariffs, such as on steel.
It also allowed zero tariffs on some products, such as aircraft and spare parts. The EU agreed to remove import duties on many U.S. goods and withdrew a threat to retaliate with higher levies.
It is not clear whether Trump’s new 15% tariffs supersede the EU-U.S. deal. If they do, the EU’s zero-tariff exemptions could disappear. The new tariffs could also be placed on top of preexisting ‘most-favored-nation’ U.S. duties, which is not the case under the EU-U.S. deal.
Furthermore, the comparative advantage the EU had with a 15% tariff would appear to have disappeared, as even countries without a deal face that rate. Trade policy monitor Global Trade Alert estimates that the EU as a whole will be 0.8 percentage points worse off, with Italy facing an extra 1.7 percentage points of U.S. tariffs.
“In particular, EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed,” the EU executive said, adding that unpredictable tariffs were disruptive and undermined confidence across global markets.
Freezing deal possible
It said that European Trade Commissioner Maros Sefcovic had discussed the issue with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick on Saturday.
Later on Monday, EU lawmakers said they would put on hold the trade deal with the U.S. after the Supreme Court ruling.
European Parliament negotiators will meet later on Monday to formally agree to freeze plans to approve the deal agreed last year, an Agence France-Presse (AFP) report said.
The parliament’s trade committee was due to give its green light on Tuesday.
Lawmakers from different parliamentary groups told AFP they supported putting the deal on ice until there is more clarity on what the court ruling means for the EU.
The European Union’s latest round of sanctions directed at Russia’s shadow fleet and energy revenues is being blocked by Hungary, the bloc’s top diplomat said Monday, a day before an anniversary marking the start of the Russian invasion on Feb. 24, 2022.
EU foreign policy chief Kaja Kallas said the bloc’s 27 foreign ministers gathering in Brussels would likely not agree on the 20th package of sanctions, which it hoped to pass ahead of the fourth anniversary of the invasion.
“I think there is not going to be progress regarding this today,” Kallas said before a regular meeting of the EU’s foreign ministers in Brussels, where discussion of the 20th sanctions package was planned.
The meeting came after Hungary threatened over the weekend to block the EU sanctions plans and to obstruct a 90 billion euro ($106 billion) loan for Ukraine until Russian oil deliveries to Hungary resume.
Oil shipments dispute
Russian oil shipments to Hungary and Slovakia have been interrupted since Jan. 27 after what Ukrainian officials say were Russian drone attacks that damaged the Druzhba pipeline, which carries Russian crude across Ukrainian territory and into Central Europe. That has led to rising tensions between Budapest and Kyiv.
Hungarian Prime Minister Viktor Orban doubled down Monday on his allegation that Ukraine was deliberately holding back shipments of Russian oil, and accused Kyiv of seeking to topple his government.
In a post on social media, Orban referred to the oil supply disruptions as a “Ukrainian oil blockade” led by President Volodymyr Zelenskyy.
“We have given President Zelenskyy firm and proportionate responses,” Orbán wrote. “He, too, must understand: by attacking Hungary, he can only lose.”
For the sanctions to pass, the 27-nation bloc needs to reach a unanimous decision.
Kallas said that efforts would also continue on Monday to advance the EU’s 90 billion euro loan to Ukraine.
Hungary elections
Facing a crucial election in less than two months, Orban has launched an aggressive anti-Ukraine campaign and accused the opposition Tisza party, which leads in most polls, of conspiring with the EU and Ukraine to install what he called Monday a “pro-Ukraine government aligned with Brussels and Kyiv.”
Poland’s Foreign Minister Radoslaw Sikorski said he believed Hungary’s surprise announcement Sunday could really be about Hungarian Prime Minister Viktor Orban’s fierce fight to hold onto power.
“I would have expected a much greater feeling of solidarity from Hungary for Ukraine,” he said in Brussels. “The ruling party managed to create a climate of hostility towards the victim of aggression. And then it is now trying to exploit that in the general election. It’s quite shocking.”
Nearly every country in Europe has significantly reduced or entirely ceased Russian energy imports since Moscow launched its full-scale war in Ukraine on Feb. 24, 2022.
Yet Hungary and Slovakia, both EU and NATO members, have maintained and even increased supplies of Russian oil and gas, and received a temporary exemption from an EU policy prohibiting imports of Russian oil.
“Tomorrow we are entering the fifth year of the war,” said Latvian foreign minister Baiba Braze ahead of the meeting. “We are fully committed both to the 20th sanctions package, including maritime and maritime services ban, but also political commitment, economic commitment, military commitment to support European values.”
‘Astonished by Hungary’s position’
German Foreign Minister Johann Wadephul said he was “astonished by the Hungarian position.”
“I don’t think it is right if Hungary betrays its own fight for freedom and European sovereignty,” Wadephul told reporters in Brussels, alluding to Hungary’s role in the fall of communism in Europe in 1989. “So we will once again come to the Hungarians with our arguments, in Budapest but of course also here in Brussels, for them to reconsider their position.”
“The German position is very clear: we must now show strength, we must support Ukraine sustainably, and we must do exactly what we did last year too: continue to raise the pressure on Russia,” Wadephul said, adding that he is sure the EU will agree on a 20th sanctions package “at the end of the day.”
On the line is a major 90-billion-euro EU loan to Ukraine meant to help Kyiv meet its military and economic needs for the next two years.
“We must release that. We must find an agreement between the member states because Ukraine needs this money heavily,” said Margus Tsahkna, the foreign minister of Estonia.
Gold surged to a three-week high on Monday as uncertainty driven by the U.S. Supreme Court’s decision to strike down a vast swathe of President Donald Trump’s tariffs pressured the dollar and pushed investors once again to the safety of bullion.
Spot gold climbed 0.6% to $5,136.22 per ounce by 07:29 a.m. GMT, having earlier hit its highest since Jan. 30. U.S. gold futures for April delivery were up 1.5% at $5,157.50.
“The court’s tariff ruling has, aside from earning the ire of the U.S. president, added another layer of uncertainty to global markets, with traders again turning to gold as a defensive play,” said Tim Waterer, chief market analyst at KCM Trade.
The U.S. Supreme Court struck down Trump’s sweeping tariffs that he pursued under a law meant for use in national emergencies, handing the Republican president a stinging defeat in a landmark ruling on Friday with major implications for the global economy.
After the court ruling, Trump said he would raise a temporary tariff from 10% to 15% on U.S. imports from all countries.
Wall Street futures and the dollar slid in Asia on Monday as murkiness around U.S. tariffs revived the “sell America” trade.
“Whether gold can claw its way back above $5,400 in the near-term may rest on how long tariff uncertainty lingers and whether the U.S. engages in military action against Iran,” KCM’s Waterer said.
Iran has indicated it is prepared to make concessions on its nuclear program in talks with the U.S. in return for the lifting of sanctions and recognition of its right to enrich uranium, as it seeks to avert a U.S. attack.
Meanwhile, data on Friday showed that underlying U.S. inflation increased more than expected in December, and signs are pointing to a further acceleration in January, which would strengthen expectations that the Federal Reserve won’t cut interest rates before June.
Spot silver also climbed 1.2% to $85.57 per ounce, a more than two-week high.
However, spot platinum edged 0.3% lower to $2,149.22 per ounce, and palladium slipped 0.4% to $1,740.25.
Türkiye is working to renew and update the Customs Union framework with the European Union, a top official said on Saturday, also underscoring efforts to keep Turkish industrial products within the European project.
“We are working to develop, renew, and update the customs union with the EU. The European Commission wants to advance relations with Türkiye,” Trade Minister Ömer Bolat told an event organized by a major business association.
“We are conducting intensive diplomatic activities to keep Turkish industrial products within the European project and increase their export capabilities,” he added.
His remarks came amid an increased debate over the “Made in Europe” strategy, through which the EU seeks to support struggling industries, but which risks sidelining Türkiye, its major trade partner, unless Ankara is also integrated in the initiative in a certain way.
The European Commission, the EU’s executive arm, is expected to soon propose new rules that could include a requirement for companies in strategic sectors to produce in Europe if they want to receive public money.
But the definition of “European preference” has triggered debate, with calls especially from France for more “Made in Europe,” while other bloc states, such as Germany, call for a “Made with Europe” approach.
Türkiye has a decades-old customs union agreement with the EU, but which remains limited, covering industrial goods and processed agricultural products.
Turkish officials and the business community have long argued and kept highlighting the importance of updating the agreement to better reflect the present needs of both sides.
A modernized agreement would expand the scope to services, agriculture in full and public procurement. The deal also carries significance in the face of growing uncertainty in global trade, and the EU and Türkiye, due to their geographical proximity, have long enjoyed strong commercial relations.
Speaking at an iftar program, organized by the Independent Industrialists and Businessmen Association (MÜSIAD), Bolat touched upon trends in the Turkish economy, while also noting that its size has now reached $1.6 trillion.
He also said that trade diplomacy is among the Trade Ministry’s most important activities, with Türkiye managing economic relations with 200 countries, according to Bolat.
“We are pushing for Turkish companies to also benefit from defense funds in Europe,” he also said.
“We are making a great effort in this regard. In Europe, Türkiye’s economic strength, industrial strength, defense strength, military strength and technological capabilities are viewed with great respect,” he added.
“In this sense, we are fighting hard to ensure that Türkiye’s rights stemming from the customs union are not compromised,” he maintained.
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