Economy
Türkiye’s August exports hit record, 8-month figure climbs to $185B
Türkiye’s exports rose 8.1% to $23.5 billion (TL 1.14 trillion) in August, reaching an all-time high for the month, a top official said on Thursday, also announcing that the eight-month cumulative figure, as well as the annualized figures, reached fresh records.
“In August, our exports rose by 8.1% compared to the same month of last year, reaching $23.5 billion. Thus, we achieved the highest August export figure,” Trade Minister Ömer Bolat said while announcing preliminary foreign trade data for the month.
“This is the third-highest growth rate after the 21% increase in April and the 22% increase in June,” he added.
“Although August is considered a vacation month in the West, this increase is truly a great achievement. This growth amounts to $1.766 billion,” the minister said.
Speaking at the event in Ankara, Bolat also said exports from the country hit a record high of $185 billion in the January-August period, up 4%.
He also noted that annualized exports reached $280.3 billion as of August, breaking the record in the republic’s history.
Starting his presentation on the data, Bolat also reflected on recently announced growth figures and inflation.
He highlighted that Türkiye’s economy accelerated starting from the second quarter, achieving growth rates of 2.3% in the second quarter and 2.5% in the first half of the year.
He also stated that Türkiye’s national income exceeded $1.7 trillion in the first half of the year, hitting its highest level ever.
He also pointed out the contribution of exports to growth, suggesting that net goods and services exports contributed 0.6 percentage points to economic growth in the second quarter.
Bolat recalled that the country’s credit default swap (CDS) premium fell to 217.5 as of Sept. 2, marking the lowest level in the last five months.
He stated that the country is expected to reach an export figure of $282 billion at the end of the year.
Bolat added that annualized services exports rose to $125 billion as of August.
“Compared to $122.5 billion in January, we see an increase of $2.5 billion. Here, too, our target is $128 billion by the end of the year,” he said.
“Despite wars and adverse global developments, all service sectors, including tourism, transportation, education, health, consultancy, information technology, film, and exhibition services, are performing successfully,” Bolat said.
He concluded that annualized goods and services exports totaled $405.3 billion.
At the same time, data shared by the Trade Ministry showed that imports increased 10.5% year-over-year to $28.7 billion in the month.
Surging public debt and rising bond yields in advanced economies are threatening to undo the progress of developing and low-income countries in reining in their own debts, International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned in a new interview with Reuters.
Georgieva said in an interview on the sidelines of a G-20 finance leaders meeting in North Carolina that bond yields are being driven upwards by higher overall debt levels, continued inflation pressures from the still-closed Strait of Hormuz, and competition for capital from AI-related debt issuance.
“This is not just a low-income developing countries problem,” Georgieva said.
“High debt levels in advanced economies, combined with stubborn inflation, could lead to debt service costs going up for everybody, including for the low-income, for the emerging markets and developing economies.”
U.S. government bonds have sold off in recent weeks, pushing the 30-year U.S. Treasury yield to near two-decade highs.
In 2022, the IMF estimated that 60% of low-income countries were in debt distress or at high risk of distress, but Georgieva said this had since eased because of strong fiscal policy reforms with support from international institutions and official creditors.
That progress is now at risk, she added.
“We need to remember that some of the emerging market economies have worked very hard to gain market credibility and compress spreads. That could be erased by a lift in debt service costs, by the increase in yields globally by advanced economies,” Georgieva said.
Nonetheless, she said that debt markets were functioning in an orderly manner and expressed optimism that there was a broad consensus among G-20 finance ministers and central bank governors on improving the G-20 Common Framework for debt restructuring and speeding up relief for countries experiencing debt distress.
Senegal test case on debt
During a G-20 session on sovereign debt restructuring, the IMF announced it had reached a staff-level agreement with Senegal for a $2.2 billion three-year loan package, conditional on Senegal’s seeking Common Framework debt treatment.
The Common Framework was launched during the COVID-19 pandemic in November 2020 to bring official and private creditors together to agree on restructuring crisis-hit countries’ debt.
But it took years to achieve debt workouts for the first two debtor countries, Chad and Zambia, amid disagreements over how any losses would be shared among private creditors, international institutions including the IMF and World Bank, and their largest lender, China.
An improved process agreed to in May aims to streamline debt restructurings by laying out required steps and linking them with an IMF financial support agreement, which also requires a memorandum of understanding with the creditors committee on the main terms.
Georgieva said that if the new process works well and quickly for a Senegal debt workout, it will encourage more countries to seek similar debt treatments.
“We have the next case,” she said of Senegal.
“Let’s make it work, and you can be sure that the fund would be very relentlessly pursuing speedy completion.”
Global stocks and bonds recuperated on Thursday, rallying ahead of the U.S. data and central banker comments that could reinforce investor expectations that the Federal Reserve (Fed) would raise rates later this month.
A recovery in global bonds helped improve sentiment in equities, while the yen powered towards its biggest two-day rally since a boost from official intervention early last month.
Oil reversed earlier losses to rise above $95 a barrel, as uncertainty prevailed over renewed military strikes between the U.S. and Iran.
In Europe, the STOXX 600 rose 0.2%, breaking three days of losses, while U.S. futures were up around 0.1%.
In premarket trading, shares in Broadcom fell around 2% after the company reported fourth-quarter revenue forecasts that fell short of expectations, while shares in Snowflake soared by over 20% after the cloud data platform provider delivered a stronger annual revenue forecast.
Investors’ immediate focus is Friday’s U.S. payrolls report after disappointing private labour data for August.
Fed Board Governor Christopher Waller is due to speak, after New York Fed President John Williams said on Wednesday rising long-term bond yields were a reflection of a solid economy rather than inflation fears, adding that he was still collecting information to drive his next monetary policy decision.
“There is an interpretation about why yields are moving higher – is it good, or bad?
I feel that the negative reasons are more often put forward than the positive reasons. Negative reasons being: too much supply of debt, fiscal risk, geopolitics and, normalization of risk premium because of oil. But it might be that a key reason behind higher yields is simply higher nominal growth,” Lombard Odier chief economist Samy Chaar said.
“If demand is strong and it’s demand that is keeping yields at high levels, it’s quite a good environment for multi-asset portfolios, in the sense that you want to be exposed to profit growth with equities, and you want to be exposed to carry as well, with credit,” he said.
Money markets currently assign a roughly 60% chance of a rate hike from the Fed this month, up from less than 40% a week ago.
Yen set for biggest two-day gain in a month
Sovereign bond yields fell, having hit multi-year highs in the last week as concerns have deepened about tighter monetary policy and deteriorating fiscal conditions.
Benchmark U.S. 10-year yields were down 2 basis points at 4.77%, while 10-year German yields were also down 2 bps at 3.353%.
The dollar index, which tracks the U.S. currency against a basket of six others, fell 0.4%, largely as a function of the push higher in the yen.
Mounting expectations that the Bank of Japan will raise rates sooner rather than later have pushed the Japanese currency up by over 2.5% in the last two days to trade around 156.1, set for its biggest two-day rise since a round of historic U.S.-Japanese intervention in early August.
The euro gained 0.18% to trade around $1.1609, while the pound was up 0.1% at $1.349 and the Swiss franc strengthened to 0.8087 francs, leaving the dollar down 0.5%.
In commodities, the oil price fell for the first time in nearly a week, although investors remained on edge after the U.S. and Iran exchanged their largest barrage of attacks since July, reviving fears of a broader regional escalation in the Middle East.
Brent crude rose for a fourth day, up 1% at $96.62 a barrel. Gold rose 1.1% to $4,434 an ounce. It is now nearly 13% above June’s seven-month lows, as geopolitical uncertainty and concern about the debasement of the U.S. dollar have lured investors back into the market.
The Dutch central bank on Wednesday said it had moved a large part of its gold reserves from North America to vaults in London over the past six months to be better prepared for a potential crisis.
Annual inflation in Türkiye cooled slightly to 31.5% in August, while month-on-month consumer prices advanced 1.84%, official data showed on Thursday.
The annual increase in prices was led by education, health and housing, the data from the Turkish Statistical Institute (TurkStat) showed.
The consumer price index (CPI) was down from 31.75% in July and marked a third straight month of easing in annual consumer prices depite ongoing conflict between the U.S. and Iran and rising prices.
Both figures came slightly below market expectations.
The consumer price index rose 22.07% compared with December 2025, while the 12-month moving average increase stood at 31.79%.
Commenting on the data, Treasury and Finance Minister Mehmet Şimşek said that inflation continued to fall despite seasonal increases in education prices and the impact of the war on fuel prices.
”Core goods inflation fell to its lowest level since November 2020 at 15.9% annually, while annual rent inflation dropped to its lowest level in 46 months,” he said on social media.
“While taking steps to limit the inflationary impact of global price shocks, we are also continuing our structural policies in line with our goal of lasting price stability,” he added.
New U.S. tariffs of up to 100% targeting foreign-made drones and certain components took effect on Thursday as Washington seeks to lower its import reliance in an industry widely dominated by China.
U.S. President Donald Trump signed an order setting out the duties in August, as the White House flagged “the national security threat posed by imports of drones and their components.”
The order also aims to boost domestic supply chains.
Drones with a takeoff weight exceeding 25 kilograms (55 pounds), as well as those with thermal imaging capabilities and docking stations, face a 100% tariff.
Smaller drones face a 25% duty.
Some components of drones that are “not particularly sensitive” will also face duties, but those only come into effect on Feb. 9 next year.
China expressed opposition to the planned tariffs shortly after they were unveiled by Trump, with Beijing urging Washington to withdraw the duties.
A commerce ministry spokesperson said the tariffs would “disrupt the global drone supply chain and further undermine a fair and competitive market environment.”
He said China firmly opposed the move.
Chinese company DJI, which was founded in 2006, has captured more than two-thirds of the global drone market in recent years, according to several studies.
Since 2022, however, DJI has been on a U.S. list of Chinese firms linked to the country’s military and subject to restrictions on access to U.S. technology.
DJI has fought its inclusion on the list.
A rise in housing supply and the return of residents to areas hit by Türkiye’s devastating 2023 earthquakes have begun to ease rent inflation, a study by the country’s central bank said Wednesday.
The quakes early on Feb. 6, 2023, were among Türkiye’s worst disasters that destroyed or damaged hundreds of thousands of buildings across 11 provinces, leaving more than 53,000 dead.
Government-led reconstruction efforts ever since have sharply increased housing supply in the affected provinces that were home to nearly 15 million people.
More than 36,930 buildings in the region collapsed, while about 311,000 were rendered unusable.
The region’s share of building occupancy permits issued across Türkiye rose to more than 20% in 2025, from an average of around 12% before the earthquakes, the Central Bank of the Republic of Türkiye (CBRT) said.
The increase in housing supply has been reflected in rental prices. Rent inflation in quake-hit provinces was significantly higher than in other regions in 2023 and 2024, but began to slow in 2025 as housing deliveries accelerated.
Remigration eases rental demand
The impact is also spreading beyond the earthquake zone, according to the CBRT study.
Rent inflation in provinces that were indirectly affected by the disaster remained broadly in line with other provinces in 2024 and 2025, but was significantly lower in 2026.
The report attributed the divergence in part to a gradual decline in rental demand in provinces that had received people displaced by the earthquakes, as residents began returning to the affected areas as housing stock recovered.
The remigration is therefore helping ease pressure on rental markets not only in the quake zone but also in surrounding provinces.
Construction capacity shifts outside quake zone
The reconstruction effort is also beginning to reshape the distribution of construction activity across Türkiye.
As major earthquake-housing projects near completion, employment in the construction sector in the affected region has started to decline, while construction employment in provinces outside the earthquake zone has increased rapidly, the report said.
The shift suggests that construction capacity developed during the reconstruction effort could increasingly be deployed elsewhere, potentially supporting a broader increase in housing supply.
The CBRT expects the increase in housing supply in the earthquake region to continue putting downward pressure on rent increases both directly in affected provinces and indirectly in surrounding areas.
The easing of rental inflation could also provide support to Türkiye’s broader disinflation process, the central bank said.
Turkish annual consumer price inflation cooled to 31.75% in July. The decline had stalled following a sharp rise in energy prices caused by the Iran war.
Global bond markets slid again Wednesday, pushing borrowing costs to levels not seen in decades as the Middle East conflict fuels higher energy prices and deepens fears over inflation and ballooning government debt.
Sovereign bond yields are a reference point for asset prices across financial markets, and the higher price of money means elevated mortgage rates for consumers and tough choices for government spending as funding costs climb.
The yield on 10-year U.S. Treasuries – which sets the tone for borrowing costs across the world economy – hit a three-year high. It is nearing the 5% level that could unsettle already jittery stock markets.
Japan’s 10-year yield was perched above 3% for the first time in 30 years, while rising gas prices meant German 10-year Bund yields were stuck at their highest since 2011 and Britain’s equivalent was at its highest since 2008. Yields rise as prices fall and vice versa.
A confluence of factors was at play, said State Street’s head of macro strategy, Michael Metcalfe, with rising energy prices causing traders to bet on rate hikes, pushing up short-dated yields.
“The narrative is also getting wrapped up with longer-term concerns about the fiscal path. In France and the U.K., we are going to get news on budgets soon. So, there are not many positives out there,” Metcalfe said.
Bond sales from big tech companies aggressively raising money to fund the AI boom have added pressure on the sovereign bond market, as deep-pocketed U.S. tech firms compete with governments for investors’ capital.
Naka Matsuzawa, chief macro strategist at Nomura Securities in Tokyo, said so-called hyperscalers’ willingness to pay reasonably high rates was pulling up yields broadly, with the focus now on whether growth can rise along with them to help economies cope with the higher rates.
Yields can continue to rise as investors demand a higher premium, said Charu Chanana, chief investment strategist at Saxo.
Bond vigilantes assemble?
Bonds have been under pressure since the start of the U.S.-Israeli war on Iran, but yields have hit multi-year highs in recent months on worries about rising debt loads in big economies, including the United States.
Governments are borrowing heavily after a jump in spending during the pandemic and the Ukraine war and energy crisis. They also face ageing populations, rising welfare bills, and higher defence investment needs.
Britain’s new government, led by Prime Minister Andy Burnham, will present a budget in October, while France is gearing up for further battles over its next budget.
And in Japan, the bond yield surge has put the spotlight on Japanese Prime Minister Sanae Takaichi and her aggressive investment plans.
The moves have raised the specter of “bond vigilantes,” investors who seek to impose fiscal discipline on governments by demanding sharply higher compensation to hold their bonds.
“The fear is that the bond vigilantes are on the loose and driving yields higher in protest over large government deficits,” said Ed Yardeni, president of Yardeni Research.
“We share the bond vigilantes’ concerns, but we aren’t convinced bond yields are, or will soon be, prohibitively high,” said Yardeni, who coined the term in the 1980s.
He said that if U.S. 10-year yields hit 5%, he expected Treasury Secretary Scott Bessent to issue more shorter-dated debt to buy back longer-dated bonds to calm markets.
The U.S. Treasury stepped into markets last month to cool long-end bond yields, though the impact was short-lived and 30-year Treasury yields are back near 19-year highs.
State Street’s Metcalfe said the sell-off in bonds was “orderly.”
Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore, said rates could start to cause pain for public and private borrowers, with higher yields also weighing on stock valuations.
Global stocks have broadly been supported by strong earnings, although they have weakened this week.
Higher yields can make bonds look more attractive and particularly dent the appeal of companies whose earnings potential lies far in the future, given the better return available on safe assets.
Policy in focus
Rising energy costs continue to dog economies, fuelling traders’ rate-hike bets.
Brent crude oil hit a one-month high Wednesday after the U.S. and Iran traded strikes, while European natural gas prices are at their highest since early 2023.
Federal Reserve (Fed) Chair Kevin Warsh triggered a sharp rise in bets on a September rate hike with a hawkish speech last week in which he acknowledged there had not been enough progress on inflation.
The rate-sensitive two-year Treasury yield is at 18-month highs.
Traders expect a European Central Bank (ECB) rate increase next week and price in about a 70% chance of a Fed hike the week after.
-
Politics2 days agoCivilians injured in PJAK terrorist attack in Iran
-
Refugees2 days agoTurkey’s Erdogan says Russia will help build more nuclear plants
-
Economy2 days agoBank of America vice president killed in Times Square stabbing
-
Economy3 days agoTürkiye’s EV maker Togg closes in on launch of affordable T6X model
-
Politics2 days agoSyrian, Turkish armies complete floating bridge over Euphrates
-
Politics3 days agoIzmir mayor faces pressure amid speculation over possible CHP return
-
Politics2 days agoMecca Defence Alliance launched in Istanbul ‘to reduce uncertainty’ in region
-
Economy2 days agoShein shares slide as much as 10% in Hong Kong trading debut