Türkiye will continue implementing structural reforms aimed at boosting production capacity, competitiveness and export diversification in line with the government’s medium-term program, a statement said on Monday.

The statement came following a meeting by the Economic Coordination Board (EKK), which said the government’s economic road map has strengthened macroeconomic fundamentals, making the economy more resilient, competitive and better positioned to adapt to changing global conditions, including the Middle East conflict.

Chaired by Vice President Cevdet Yılmaz, the EKK includes ministers of finance, trade, labor, energy, industry, and agriculture, along with senior officials from other key economic institutions, including the central bank.

The board said Türkiye has maintained uninterrupted economic growth for 23 consecutive quarters despite multiple external shocks, while the unemployment rate has remained in single digits.

“The budget balance continues to follow a path consistent with program targets, while Türkiye’s risk premium (CDS) has approached pre-conflict levels,” the statement said.

The Middle East conflict, triggered by U.S. and Israeli airstrikes on Iran, effectively shut the key Strait of Hormuz, sending energy prices sharply higher.

That came as a challenge for countries that rely on imports to meet their energy needs, including Türkiye.

The board said rising prices were creating pressure on inflation and the current account balance, but stressed relevant institutions were implementing “timely and effective” measures to limit the impact.

During the meeting, officials reviewed the implementation status of structural reform measures under the 2026-2028 medium-term program and discussed additional steps to accelerate progress.

Against a backdrop of heightened global uncertainty, geopolitical risks and rapid technological transformation, the statement said Türkiye is well-positioned to capitalize on emerging opportunities thanks to its strong macroeconomic foundations and diversified policy framework.

The EKK reiterated its commitment to structural reforms that improve the business and investment environment, strengthen production capacity, enhance competitiveness and support export diversification.

It also highlighted ongoing efforts to accelerate industrial transformation, strengthen research and development, innovation and technology-focused production, and advance green and digital transformation initiatives.

The statement emphasized that simplifying bureaucratic procedures, improving access to qualified labor, facilitating work permit processes and ensuring a predictable investment climate are becoming increasingly important as global competition for investment intensifies.

As part of the “Strong Hub for Investments in the Century of Türkiye Program,” authorities plan to gradually expand the “One-Stop Office” model, currently operating at the Istanbul Financial Center, across the country to provide investors with faster and more efficient services.

Officials further assessed progress in the One-Stop Office initiative and outlined measures to ensure investors can access permits, licenses and other administrative procedures through a single platform.

The board also evaluated labor market developments and considered policies aimed at facilitating the employment of foreign workers in sectors facing labor shortages, while improving work permit procedures.

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Swiss citizens head to the polls on June 14 to vote on whether the country’s population should be limited to 10 million, in a referendum some compare to a “Swiss Brexit” and that many businesses fear could hurt the economy if approved.

Supporters of the cap, championed by the right-wing Swiss People’s Party (SVP), say the expanding population is testing local infrastructure, roads and public transport to the limits, as well as ⁠driving up rents and crime.

Companies and employers, however, worry a “yes” vote would limit ⁠Switzerland’s access to skilled labor and damage relations with the European Union, its biggest export market.

“As a Swiss citizen, it concerns me very much for the future of our country and its prosperity,” said Martin von Moos, CEO of luxury hotels Belvoir in Ruschlikon and Sedartis in Thalwil, near Zurich.

“If we ​lost all of our foreign staff, the hotel simply wouldn’t function,” he said, noting nearly half of his 115 ​staff came ⁠from outside Switzerland.

The issue has been finely balanced in recent studies, with the most recent poll showing 47% in favor and 52% against.

The Swiss population had grown to 9.1 million by the end of 2025, from 7.3 million when free movement of people between Switzerland and the European Union was introduced in 2002.

Foreigners now make up nearly 28% of the population.

“Switzerland is a small country with a limited territory, and it has experienced the highest population growth in recent years,” SVP lawmaker Yvan Pahud told Reuters.

The vote is the latest example of right-wing parties tapping into anxiety over immigration, housing and public services, seen in Britain’s 2016 vote to quit the EU and the rising popularity of parties such as France’s National Rally and AfD in Germany.

Cap could be ‘showstopper’

Business critics point to the damage they say the population cap could inflict on one of Europe’s most resilient economies.

Molecular Partners, a Zurich-based biotech company – more than half of whose roughly 120 staff are non-Swiss – said it was already tough to get the people it needed.

“I think if we said we could only hire out of the Swiss talent pool, or if we could only collaborate with the Swiss companies, ⁠it ⁠would basically be a showstopper,” said Daniel Steiner, senior vice president targeted radio therapeutics at the company.

“We may be forced to move things out of Switzerland.”

Rudolf Minsch, chief economist of business association economiesuisse, said the cap was a “populist attempt” to fix complex problems with a simplistic, artificial limit.

“It sells the illusion of a free lunch, and will not solve our housing or traffic problems,” Minsch said.

Like many European countries, Switzerland faces an aging population.

By 2055, the proportion of the Swiss population aged between 20 and 64 will decline from 60% to 56%, according to the Swiss statistics office. Meanwhile, the proportion of people aged over 65 will climb to 27%, from 21% currently.

Opponents of the cap argue many newcomers have been entrepreneurs who developed the Swiss economy, citing well-known companies such as Nestle, Swatch and ABB that were set up either wholly or partially by foreigners.

According to a 2023 study by Avenir Suisse, 39% of all company founders in Switzerland were foreigners.

Dent to growth

Referendums are a ⁠cornerstone of Swiss politics, with voters heading to the polls four times a year to decide on various national and regional issues.

Under the latest proposal, if Switzerland’s population exceeded 9.5 million – a milestone that is forecast for 2031 – the government would be required to take measures to prevent it reaching 10 million, which it is forecast to hit in 2042.

At 10 million, Bern would be required to terminate international ​accords that encourage population growth.

That includes the agreement with the EU allowing free movement of people, a condition of the complex web of Swiss accords with Brussels that ​give the country access to the European single market.

Claude Maurer, chief economist at BAK Economics, a research institute, said if Bern abandoned its bilateral accords, Swiss economic growth between 2028 and 2045 would be 7.1% lower, equivalent to a loss of 685 billion Swiss francs ($867 billion).

Growth would slow, while inflation, driven higher by ⁠wage increases, could trigger higher ‌interest rates, Maurer ‌said.

Thomas Matter, another SVP lawmaker and banker, dismissed the concerns as scaremongering.

Only one-out-of-10 immigrants were workers with sought-after skills and ⁠the rate of GDP growth per head had declined since the increase in immigration, Matter said.

“We are ‌not against immigration, but it has to be moderate and controlled so we bring in the right people,” he said.

“Before we had qualitative immigration, now we have quantitative immigration. Switzerland is still the same size as it ​was in 1848, and more and more people are ⁠living in the same space.”

Swiss corporate giants Roche, Nestle, ABB, UBS and Novartis have all criticized the cap.

“We reject the initiative,” ⁠Roche said, adding that a “yes” vote would threaten agreements with the EU and exacerbate a shortage of skilled workers. “Companies depend on access to qualified workers – especially from the EU.”

Hotelier ⁠von Moos, who is also head of ​the Swiss hotels association, said some hotels could be forced out of business, prices would rise, and it would be harder for non-European visitors to come to Switzerland.

“We call this initiative a wolf in sheep’s clothing. It’s a simple message but it hides serious consequences.”

The Turkish central bank is set to convene for a key policy meeting this week, another one since the start of the U.S.-Israeli war with Iran, which has sharply lifted global oil prices, prompting a more cautious stance by the economic actors worldwide.

The Central Bank of the Republic of Türkiye (CBRT) will, June 11, decide whether to keep interest rates unchanged at the current level of 37% or instead potentially opt for a hike as recent data indicated a mild uptick in annual inflation in May, despite the monthly reading coming in less than the prior month.

In May, consumer prices increased 1.71% monthly and 32.61% annually, official data showed on Friday. That compared to 4.18% ​monthly and 32.37% annually registered in April.

The data shared by the Turkish Statistical Institute (TurkStat) revealed that although education and housing remained among the leading drivers that contributed to the annual surge in the index, transportation and food and non-alcoholic beverages also posted increases above the median.

The central bank raised its year-end interm ​inflation target to 24% from 16% last month, forecasting that the short-term inflationary effects of the Iran war would remain “pronounced,” as the war-related surge in energy prices has impacted countries that rely on energy imports.

“Although geopolitical risks and ⁠volatility in energy prices continue to exert pressure on the inflation outlook, we have limited these effects ​with the steps we have taken,” Treasury and Finance Minister Mehmet Şimşek said in a post on X, commenting on the May data.

Prior to the outbreak of the Iran war, Ankara had managed to lower inflation to the level of around 30s compared to above 80% in late 2022.

Earlier this week, Şimşek pledged that commitment to disinflation remains “firm.”

However, amid the Iran-war related pressures, which have weighed on prices in different regions, including Europe, analysts are debating whether central banks would turn to rate hikes to contain the fallout.

This week will also mark the meeting of the European Central Bank (ECB), where the bank is expected to be the first one among major global banks to raise rates amid the war. Polls point to a definite hike by a quarter percentage point, to 2.25%, as inflation in the eurozone accelerated over the past two months.

For Türkiye, economists currently expect the bank to keep rates unchanged at 37%, although a hike is not excluded.

A recent survey by financial services provider Matriks, suggested that the CBRT is most likely to keep rates on hold. Of 33 economists who provided forecasts for the June Monetary Policy Committee (MPC) meeting, 27 predicted that the weekly repo rate would remain unchanged.

Six economists, however, predicted that the policy rate could be increased by 300 basis points to 40%.

Last month, amid the latest political developments in the country, U.S. banking giant JP Morgan also said it expected the policy rate to be hiked to 40%.

Dutch banking giant ING, in a report shared following the latest inflation data, said it expects the central bank “to keep interest rates unchanged at the June MPC meeting, taking into account recent macroprudential tightening with reduced caps on lending growth.”

“Nevertheless, ongoing geopolitical uncertainties and domestic political developments may call for a more cautious approach, which could lead to an upward adjustment in the policy rate – from 37% to the current effective funding rate of around 40%,” it added.

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Türkiye’s micro export volume has grown nearly 15-fold over the past 10 years, the Trade Ministry said in a written statement on Sunday, suggesting that the global market presence of producers, entrepreneurs, and the e-export ecosystem has notably increased.

In a written statement on the report dubbed “Export Routes 2025 under the Simplified Customs Declaration,” the ministry said the report provides comprehensive data and detailed analysis of Türkiye’s development in cross-border e-commerce, highlighting the strong performance of micro exports in recent years.

Micro exports refer to small-volume, low-value international trade transactions. Designed for e-commerce and small and medium-sized enterprises (SMEs), they usually bypass traditional red tape through simplified digital declarations.

The statement said that the report includes comprehensive assessments of which products are shipped to which countries under micro export schemes, country-based consumer preferences, unit sales values of products, sectors in which Turkish sellers are strong, and product groups with development potential.

It also provides a detailed analysis of returned goods in micro export transactions, it added.

It also stated that the study examines the distribution of marketplace and non-marketplace sales, as well as the use rates of road, air, Ro-Ro, and maritime transport in micro exports.

The statement highlighted that while there has been a contraction in some markets, demand for Turkish products in certain countries has increased significantly.

“In an era where protectionist policies are gaining strength in global cross-border e-commerce, the increase in our country’s parcel volume is important as it demonstrates the adaptability of our companies to digital trade and their international competitiveness,” it further said.

“Thanks to the simplified customs declaration system, access to global markets is becoming easier, especially for small and medium-sized enterprises, women entrepreneurs, and young entrepreneurs, while Türkiye’s production capacity is becoming more visible globally through digital trade channels,” it added.

The ministry also emphasized that it would continue to strengthen the e-export ecosystem, develop trade-facilitating practices, and support entrepreneurs in expanding their global presence in the coming period.

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The staggering costs of Israel’s multi-front war and Prime Minister Benjamin Netanyahu’s vision of turning his country into a “Super-Sparta” of the Middle East are driving up the defense budget and raising fears of cutbacks in education and health care.

The total cost of the attacks and involvement in a series of interconnected regional conflicts after Oct. 7, 2023, stood at 405 billion shekels ($138 billion) as of late April, according to the governor of the Bank of Israel, Amir Yaron.

“That’s a huge figure, more than 17% of GDP (gross domestic product),” he said during a recent economic conference in Herzliya, north of Tel Aviv.

Just the military campaign against Iran, which began with a wave of U.S.-Israeli strikes on Feb. 28, incurred an additional cost of 35 billion shekels for the state up until a cease-fire took effect on April 8, according to an initial estimate by the country’s finance ministry.

Following the adoption of the 2026 budget in late March, the government noted the defense ministry’s budget had more than doubled since October 2023, when Tel Aviv escalated attacks on Gaza.

To support the war effort, the government borrowed heavily in international markets in 2024 and 2025.

It has reached the point where public debt now accounts for more than 69% of GDP, compared to 60% before the war, according to the Treasury.

Taxes and social security contributions have also increased.

‘Paying twice’ for war

Israelis are “paying twice” for the war, said Esteban Klor, an economics professor at Jerusalem’s Hebrew University.

The first cost, he told AFP, is via the decline in government social spending and reduced investment in public services resulting from several successive “across-the-board” budget cuts, even as “we are … increasing the debt.”

“Education will suffer, the quality of infrastructure will decline, as will the performance of the health care system,” he said.

The second cost is to economic growth, though this has been less visible as the Israeli economy overcame the initial shock of the war. GDP had returned to its 2022 level by 2024, and it continued to grow.

However, the economy shrank at an annualized rate of 3.3% in the first quarter of 2026, reversing earlier growth and marking a downturn driven by the conflict with Iran.

The ongoing mobilization of tens of thousands of reservists since October 2023 is also taking a toll.

“Since … many of our workers are in the army rather than at their jobs, this affects production,” Klor explained.

According to a survey published on June 1 by the Israel Democracy Institute (IDI) think tank, 31% of respondents said they had experienced a decline in their wages or income since Oct. 7, 2023.

The phenomenon is hitting the self-employed and lowest-income workers the hardest.

At the Herzliya conference, the deputy head of budgets at the finance ministry, Tamar Levy-Boneh, warned against a “trauma economy,” in which the sense of shock and failure from Oct. 7 leads the military to constantly demand more funding to ensure the country’s security.

“The security establishment must learn to meet its needs in a way that does not undermine the standard of living and must assume its share of responsibility,” Levy-Boneh said.

‘Super-Sparta’

But Netanyahu advocates the opposite view.

In September 2025, he said Israel had no choice but to become a “Super-Sparta,” a reference to the ancient Greek city-state devoted entirely to war.

As divergences emerge between Netanyahu and U.S. President Donald Trump regarding Israel’s offensive in Lebanon, which it conducts with the pretext of fighting Hezbollah, and how to end the war with Iran, the Israeli premier is pushing for greater self-sufficiency.

Under his vision, Israel would gradually wean itself off its reliance on the massive military aid it receives from the United States.

He confirmed as such on May 3, vowing to invest 350 billion shekels over the next decade in the national defense industry to ensure “overwhelming aerial superiority.”

Economics professor Klor warned that the defense budget could exceed 10% of GDP and called for a swift return to a “more reasonable” level.

Israel is one of the developed countries where inequality is most glaring, and the dragging war is not helping.

According to the latest available study by the Israeli National Insurance Institute, the proportion of children living below the poverty line rose from 27.6% to 28% between 2023 and 2024.

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Participation finance in Türkiye has grown steadily over the past decade, with its share of total financial assets standing at nearly 9% today, the Turkish central bank chief said on Friday.

That is up from a 4.5% share in the early 2010s, Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan told the 3rd Global Islamic Economy Summit.

Often known as interest-free or Shariah-compliant finance, the sector has expanded in a “stable and consistent” manner rather than through rapid growth spurts, Karahan said.

He highlighted that Islamic finance provides an alternative funding channel, particularly for small and medium-sized enterprises (SMEs) that may struggle to access conventional credit.

“Many SMEs that cannot obtain loans through traditional banking tools are able to continue their operations through participation finance instruments,” he said, adding that this contributes to broader financial inclusion and the efficient use of idle savings.

Karahan suggested that participation banks have demonstrated stronger loan growth compared to conventional banks, contributing to their rising market share.

He also noted that the CBRT has been developing liquidity management tools compatible with participation finance principles, alongside macroprudential policies tailored to the sector’s structure.

“The calibration process has been ongoing for two years,” Karahan said, adding that some CBRT credit facilities for exporters and long-term investment financing have been restructured so they can also be accessed by participation finance institutions, helping increase their market presence.

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