Economy
EBRD weighs support to countries it works in to cope with Iran war
Europe’s top development bank, the European Bank for Reconstruction and Development (EBRD), is considering support programs to help businesses in the countries it serves to weather the fallout in the energy, food and financial sectors from the ongoing war in Iran, its president said Monday.
The war, in its third week, has pushed oil prices above $100 per barrel, cut access to fertilizers, food and goods that transit the key Strait of Hormuz and rerouted air travel.
The European Bank for Reconstruction and Development fosters private sector development projects in some 40 countries in Eastern Europe, Central Asia, the Middle East and Africa.
Focus areas for support
“We are really already looking at what we can do to support our clients in the countries most definitely affected,” EBRD President Odile Renaud-Basso told Reuters.
The support, she said, could focus on helping companies afford higher energy prices, access fertilizer during supply disruptions or keep tourism-focused businesses afloat in the likes of Egypt, Jordan and Lebanon through travel disruptions.
“This is a new shock, and we need to be ready to provide support to accommodate this shock,” said Renaud-Basso. She gave no further details on what this support could look like.
Concerns over remittances, project delays
Among issues of concern for the EBRD would be a potential decline in remittances from migrant workers in the Gulf sending money to home countries such as Egypt and Jordan, she said.
The bank is also watching closely for any projects that are delayed, cancelled, or lose funding as a result of uncertainty and higher energy costs.
Macroeconomic challenges
“The cost of funding has been increasing everywhere … that could also create some macro challenges for some countries which already had quite a high level share of revenues allocated to debt repayment,” she said, noting this was an issue for some Mediterranean countries, Egypt, Tunisia and Sub-Saharan Africa.
The yields on U.S. government debt, baseline for the cost of capital, have risen sharply since the start of the conflict.
Meanwhile, Gulf states are reviewing how they deploy trillions of dollars invested by their sovereign wealth funds in anticipation of offsetting the losses triggered by the war.
Energy security and diversification
“What is clear … is that we will see a lot of demand for investment in energy security and diversification of energy,” she said.
Countries such as Türkiye, which have already invested in energy diversification and renewables, are less vulnerable to external shocks.
“That will be a trend that we are likely to see, and a lot of demand for this kind of investment, for example.”
Implications for Ukraine
Renaud-Basso said the Iran war was also “not helpful for Ukraine” because higher energy prices could boost Russian state coffers and stress Ukraine’s balance sheets. The EBRD halted investment in Russia after it invaded Ukraine in 2022.
She also said there “may be some tension on the supply” for weapons for Ukraine.
“For us, it’s very important to continue to support Ukraine, and that the funding committed to Ukraine by the EU in particular is delivered.”
Fitch Ratings sees risks to Türkiye’s sovereign rating and banking sector as remaining limited and manageable if tensions in the Middle East prove short-lived, while it warns a prolonged period of high energy prices could increase vulnerabilities.
The U.S.-Israel war on Iran is in its third week and no end in sight. The Strait of Hormuz remains largely closed off, with U.S. allies rebuffing U.S. President Donald Trump’s request for help to reopen the critical waterway, raising energy prices and fears of inflation.
Fitch said on Monday that its baseline scenario assumes the conflict will be temporary, in which case the impact on Türkiye’s credit profile and financial system would be contained.
However, the credit rating agency cautioned that persistently high oil prices could add to inflationary pressures and widen the country’s current account deficit.
It said the impact of the conflict on Türkiye and its banking sector would depend on policy response.
Fitch said measures introduced by the Central Bank of the Republic of Türkiye (CBRT) since the start of this month signal a continued commitment to bringing down inflation.
Responding to the volatility amid the conflict, the CBRT took liquidity measures that lifted overnight rates to around 40%, up 300 basis points from prewar levels.
Fitch expects monetary policy to remain relatively tight, forecasting a real policy rate of around 4.5% by year-end, which underpins its projection that inflation will decline to 25% by the end of 2026.
Annual inflation slowed from over 40% at the beginning of last year to just over 30% this January. But a rise to 31.5% last month signaled a slowdown in disinflation.
Encouraged by the downward trend, the CBRT had slashed interest rates by 900 basis points since mid-2025 to 37%. But it halted its easing cycle last week due to fallout from the Iran war that it said could impact inflation.
Fuel mechanism provides buffer
Fitch noted that Türkiye has reactivated a fuel price adjustment mechanism to help contain domestic price pressures amid rising global energy costs.
The sliding scale system adjusts the special consumption tax (ÖTV) on fuel products and prevents higher oil prices from being fully passed through to consumers.
Fitch said the fiscal burden of such measures could be absorbed thanks to available budget space, supported by a roughly 2 percentage point decline in the budget deficit-to-GDP ratio last year.
Banking sector seen resilient
Fitch said Turkish banks are generally well-positioned to withstand potential shocks, citing adequate liquidity and capital buffers across the sector.
These buffers, it said, should help mitigate risks to operating conditions even in the face of heightened geopolitical uncertainty.
Risks rise if tensions persist
While the baseline outlook remains stable, Fitch warned that a longer-lasting conflict and sustained increases in energy prices would pose more significant challenges for Türkiye’s macroeconomic outlook.
Such a scenario could complicate the disinflation process and put additional pressure on external balances, the agency said.
Tens of millions more people could face acute hunger if the Iran war continues through to June, according to a new analysis from the World Food Programme (WFP) released on Tuesday, which flagged the gravity of the situation by suggesting this could push global hunger levels to an “all-time” high.
The U.S.-Israeli attacks on Iran have choked up key humanitarian aid routes, delaying life-saving shipments to some of the world’s worst crises.
An extra 45 million are projected to be pushed into acute hunger because of rises in food, oil and shipping costs, pushing the global tally above its current record level of 319 million, Deputy Executive Director of the World Food Programme Carl Skau told reporters in Geneva.
“This would take global hunger levels to an all-time record and it’s a terrible, terrible prospect,” he said.
“Already, before this war, we were in a perfect storm where hunger has never been as severe as now, in terms of numbers and how deep that hunger is,” he added.
Skau said its shipping costs are up 18% since the U.S.-Israeli attacks on Iran began on Feb. 28 and that some have had to be rerouted.
The extra costs come on top of deep spending cuts by the WFP, as donors focus more on defense, he added.
According to the WFP, countries in sub-Saharan Africa and Asia face the highest risk due to reliance on imports, with projected increases in hunger across both regions.
“If this conflict continues, it will send shockwaves across the globe,” Skau said, warning that vulnerable families “will be hit the hardest.”
The Turkish delight trade saw a positive momentum in the recent period, with sales topping the $150 million level over five years, according to a report on Monday.
The traditional delicacy continues to sweeten palates in many countries, particularly in the United States and Europe, a report by Anadolu Agency (AA) suggested, adding that $150.4 million worth of Turkish delight was sold over the past five years.
Turkish delights, alongside candies, chocolates and other desserts, become an indispensable part of holiday celebrations each year.
As citizens increase their shopping ahead of the Ramadan Bayram (Eid al-Fitr) holiday, Turkish delight, one of the traditional flavors of Turkish culture, ranks among the most popular sweets purchased.
In addition to strong domestic demand, Turkish delight is also among the delicacies that attract interest abroad. Produced in a wide variety of flavors including pistachio, almond, hazelnut, rose, orange, chocolate, cream and plain, Turkish delights leave a lasting taste in many countries.
Positive contribution to foreign trade
According to official data, Türkiye saw a steady rise in sales of this delicacy in recent years.
Türkiye exported $26.1 million worth of Turkish delight in 2021 and saw this figure rise further to $28.6 million in 2022, $29.8 million in 2023, and $32.1 million in 2024, according to data from the Turkish Statistical Institute (TurkStat).
Last year, exports increased 5.4% year-over-year to $33.8 million.
As a result, Türkiye exported $150.4 million worth of Turkish delight between 2021 and 2025. Imports during the same period totaled $189,948, resulting in a foreign trade surplus of $150.2 million for the product over five years.
In January this year, Türkiye exported $2.6 million worth of Turkish delight, while imports were minimal and recorded at $1,632.
Strong demand in U.S., West Europe
The countries showing the greatest demand for Turkish delight during this period were the United States, Germany and the United Kingdom.
Over the five years, Türkiye sold $27.9 million worth of Turkish delight to the United States. Exports to Germany meanwhile, totaled $19.7 million, while $19.1 million worth was shipped to the United Kingdom.
In January this year, these countries again ranked at the top of export destinations. Exports amounting to $411,493 were registered in the United States, $352,954 to Germany, and $232,794 to the United Kingdom.
Mustafa Kahveci, head of a local bakers and confectioners’ chamber in the capital Ankara, said that tradespeople selling Turkish delight and confectionery are continuing their holiday preparations.
Kahveci noted that Turkish delight, one of the traditional treats offered to guests, receives demand from both domestic and international markets.
Emphasizing the product’s long history, he said: “Turkish delight is exported to European and Middle Eastern countries. Our producers currently export to 10 countries, and the volumes are not insignificant. Turkish delights are also very popular abroad.”
Deyiş Tecer, a producer of Turkish delight, confectionery and halva, said they have continued manufacturing and sales at their family shop, inherited from his grandfather, since 1979.
Tecer noted that they offer more than 50 varieties of Turkish delight to consumers.
“We diversified our product range by producing with fresh seasonal fruits. Many varieties are preferred, but during the holiday period, people tend to choose familiar products,” he explained.
“Our hazelnut, pistachio and plain Turkish delights are more popular during Eid. Mixed assortments are also in demand as gifts. We receive orders from abroad as well and send products to Gulf countries,” he added.
The fieldwork for the most comprehensive general agricultural census in Türkiye in history of the republic, conducted in cooperation between the Turkish Statistical Institute (TurkStat) and the Ministry of Agriculture and Forestry, has been largely completed, according to a report on Sunday.
The census, which began in July last year to collect data that plays a crucial role in shaping agricultural policies, has reached its final stage, according to information obtained by Anadolu Agency (AA) from the statistics office.
Accordingly, the fieldwork for the most comprehensive general agricultural census has been mostly completed.
Surveys were conducted with 96% of the approximately 4.2 million producers and farmers targeted in the study. The remaining 4% largely consists of individuals who could not be reached or who passed away.
The census collected detailed information on many structural aspects of agricultural enterprises, including legal status, management, land use, ownership type, irrigation status, livestock holdings, use of tools and machinery, and other productive activities, the report by AA said.
The work of the census offices, which played an active role in the data collection process carried out since July of last year, ended on Jan. 30. For the few remaining surveys, data collection continues by phone, conducted by about 300 part-time project staff working in TurkStat’s regional directorates.
Moreover, in the first half of this year, the analysis and quality control of the data collected from the field are planned to be conducted, and in the second half, the main results are planned to be shared with the public.
Additionally, in April and May, three separate thematic studies will be carried out using sampling as part of the “General Agricultural Census Project.”
The results of research on the themes of “agricultural labor,” “use of technology in agriculture,” and “animal shelters, fertilizer, and soil management” are expected to be published in 2027.
The construction sector made the largest contribution to Türkiye’s economic growth in 2025 thanks to housing production, urban transformation projects and infrastructure investments, sector representatives said, adding that they expect this momentum to continue this year.
The Turkish economy grew by 3.6% last year, according to official data, being supported by the economic program implemented and maintaining expansion momentum despite tighter monetary conditions.
Like this, Türkiye ranked among the three fastest-growing economies among member countries of the Organisation for Economic Co‑operation and Development (OECD).
When the activities forming gross domestic product (GDP) are examined, the activity in the construction sector grew by 10.8% in 2025 compared with the previous year. It was the sector with the highest growth last year.
Sector representatives suggested the data once again reveals the increasing momentum in construction, noting that the surge in housing production, urban transformation and infrastructure investments has also made a significant contribution to the national economy.
Neşecan Çekici, head of the Real Estate Investors Association of Türkiye (GYODER), recalled in a statement that construction was among the sectors contributing most to economic growth.
“This development clearly shows that the sector has once again become one of the main drivers of growth,” she told Anadolu Agency (AA), according to remarks published on Sunday.
“Construction has a multiplier effect that activates a very broad ecosystem simultaneously, including cement, iron and steel, ceramics, glass, paint, furniture, logistics, architecture and engineering, finance, insurance and real estate services,” Çekici continued.
“For this reason, the acceleration in construction spreads across many areas of the economy, from industry to services, and from employment to tax revenues,” she suggested.
Çekici also noted that the number of salaried employees in the construction sector rose from 1.8 million to 2 million over the past year.
At the same time, she pointed out that reconstruction efforts in earthquake-hit regions, urban transformation projects and infrastructure investments have helped keep production capacity and supply chains active through public-private cooperation.
“However, for sustainability, not only increased production but also access to financing, cost stability and predictable licensing and planning processes must be strengthened simultaneously,” she said.
Growth expected to continue
Furthermore, Çekici said the sector’s contribution to growth is expected to continue this year as well, although the continuation of momentum will depend on financial conditions. She added that in 2026, housing projects that are high-quality, located in the right areas and aligned with real demand will stand out.
She also pointed to several factors that would determine the sector’s trajectory this year, citing them as including improved access to credit and financing, easing volatility in input costs and labor costs, and ensuring that urban transformation expands with a focus on “quality and resilience.”
Access to financing
Ziya Yılmaz, chairperson of the board of the Housing Developers and Investors Association (KONUTDER), similarly said that the construction sector’s 10.8% growth last year once again demonstrated its multiplier effect and strategic importance.
He emphasized that the comprehensive reconstruction process in earthquake-affected regions is being carried out on a scale that could set a global example.
Yılmaz also said that the construction sector does not only mean housing production but that it directly affects around 250 sub-sectors, making it one of the sectors with the broadest impact on employment, production and tax revenues.
“Our sector continues to make a strong contribution to the economy through both reconstruction in earthquake-affected areas and production activity across the country. However, in order for this contribution to turn into a sustainable locomotive effect, improving access to financing and supporting production continuity are of great importance,” he furthered.
Yılmaz added that whether last year’s momentum can be sustained in 2026 will depend not only on domestic demand dynamics but also on global economic developments and geopolitical developments in the surrounding region.
He said Türkiye retains its potential thanks to its strong production capacity and dynamic housing demand.
Noting that the increase in building permits last year needs to translate into accelerated production, he said land and financing policies should be addressed together.
Safest haven in the region
Engin Keçeli, chairperson of the Association of Construction Contractors and Real Estate Developers (INDER), said they were proud that the construction sector made the largest contribution to growth in 2025.
“This year will be much better. We never wish for instability in our region, but the whole world has seen that Türkiye is the safest haven in this region,” he said.
“The value of our country is being recognized again. For this reason, we believe 2026 will be better than 2025,” he added.
Pointing out that infrastructure investments in Türkiye have always continued, he went on to stay they have managed to recently overcome the slowdown experienced in housing production in previous years.
“The increase in new building permits this year indicates that housing production will continue. Because demand is high, we are obliged to increase supply. This will automatically bring growth,” he said.
Mustafa Ekiz, head of the Real Estate and Construction Platform, said that for Türkiye’s economic growth to continue this year, sectors outside construction must also come into play.
He noted that this would improve the quality of economic growth while supporting employment and productivity.
Ekiz said that in the short-term, housing production and public and private sector investments could support growth, but in the long-term the country needs to accelerate transformation in sustainability, technology, exports and high value-added production.
The top U.S. and Chinese officials began their economic and trade talks in Paris on Sunday, Chinese official news agency Xinhua reported.
The meetings, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, are expected to pave the way for U.S. President Donald Trump’s state visit to Beijing to meet Chinese leader Xi Jinping in about two weeks.
The White House has said that Trump will travel to China from March 31 to April 2, although Beijing has not officially confirmed it.
Bessent said on Thursday that his team will continue to deliver results that put America’s farmers, workers and businesses first. China’s commerce ministry said Friday the two sides are set to discuss “trade and economic issues of mutual concern.”
Trump’s visit to China will be the first for a U.S. president since he went in his first term in 2017. It will come five months after the two leaders met in the South Korean city of Busan and agreed to a one-year truce in a trade war that temporarily saw tit-for-tat tariffs soar to triple digits before the two sides climbed down.
Still, trade remains a source of tensions. The Commerce Ministry on Friday hit back against the Trump administration’s new trade investigation into 16 trading partners, including China. The investigation, which came after a Supreme Court ruling struck down Trump’s sweeping global tariffs that were imposed last year, could pave the way for new tariffs.
Another issue that could be discussed is the Iran war, especially when global anxiety is soaring over oil prices and supplies. Trump said Saturday that he hopes China, France, Japan, South Korea, the United Kingdom and others will send warships to keep the Strait of Hormuz “open and safe.”
Before Sunday’s talks, Gary Ng, a senior economist at French bank Natixis and a research fellow at the Central European Institute of Asian Studies, said the Paris meeting is likely the most important bilateral one before the Xi-Trump summit.
The key issue is “whether China and the U.S. can agree on what is agreed and manage disagreement. Iran is a new factor, but Beijing is more concerned about the flip-flopping of U.S. policies,” he said.
Last week, Chinese Foreign Minister Wang Yi said it would be a “big year” for China-U.S. relations. While he did not confirm the state visit, Wang said that “the agenda of high-level exchange is already on the table.”
Bessent and the Chinese vice premier have led trade negotiations between the countries since last year, having met in Geneva, London, Stockholm, Madrid and Kuala Lumpur, Malaysia.
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