Economy
Erdoğan says those responsible for fund turmoil to be held accountable
President Recep Tayyip Erdoğan said Thursday that the recent problems involving investment funds posed no risk to Türkiye’s financial system or the wider economy, adding that those responsible will be held accountable.
That marked Erdoğan’s first comments since authorities took steps last week to support financial stability after some investment funds defaulted on redemption requests.
Prosecutors are currently investigating the activity of 131 investment funds held by seven companies holding more than $18 billion in assets.
All of them were placed into liquidation last week by the Capital Markets Board (SPK), which said they handled the money of nearly half a million investors.
Investigations are focused on suspected share price manipulation in thinly traded stocks, with dozens of people, including fund managers and senior executives, arrested or detained.
Judicial proceedings are ongoing, Erdoğan told reporters on the sidelines of the U.N. General Assembly in New York.
He said the problems had emerged in a limited area of the capital markets and involved a certain number of funds.
Erdoğan said the issue did not pose a risk to either the financial system or the Turkish economy, arguing that portraying it as a problem affecting the entire market would be “unfair.”
The necessary steps are being taken in line with capital market principles and the law, while relevant institutions are pursuing the matter, the president noted.
“Whoever is responsible will be held accountable before the law. There should be not the slightest hesitation on this matter,” Erdoğan said.
Justice Minister Akın Gürlek said Wednesday the government’s top priority was to recover the money of investors.
Finance chief to hold meetings
Treasury and Finance Minister Mehmet Şimşek will hold a series of meetings Thursday and Friday to discuss the process of the funds liquidation, Anadolu Agency (AA) said.
The meetings will focus on technical work on the liquidation of the funds and payments to investors, with officials from relevant institutions and organizations also participating, the report said.
It said the main priority of the meetings would be to preserve the rights and interests of investors, to ensure the healthy functioning of markets and to discuss steps that may be taken to support financial stability.
Coordination among various institutions and a technical road map will also be on the agenda, it added.
Erdoğan said legal and administrative measures would be introduced if necessary to prevent similar problems from occurring again.
“We will ensure that whatever measures are needed, including legal and administrative regulations, are implemented to prevent a similar problem from occurring,” he said.
He also stressed the importance of conducting the process transparently and carefully given the structure of capital markets, adding that instructions had been issued accordingly.
The problems began to emerge after the SPK on Aug. 28 issued new guidelines on investment funds, saying they could no longer invest all their assets in one stock but were required to diversify.
The move sought to address concerns that many funds were heavily investing in a small number of obscure or hard-to-sell stocks.
In order to comply, funds began selling stocks, spooking investors who got the jitters and started trying to cash in their investments.
But scandal erupted last week when several companies admitted they were unable to liquidate their assets fast enough, raising liquidity concerns.
“We’ve seen the savings of some citizens.. have been exploited and transferred elsewhere and smuggled abroad. Our goal is now to bring them back and ensure that our citizens get their money,” Gürlek said in a YouTube interview in New York.
Prosecutors have “initiated proceedings against 63 individuals” over allegations of organized crime, fraud, defrauding the state and violations of the capital markets law, he said.
In certain cases, the value of the stocks had been wildly exaggerated, Gürlek said, pointing to one without a listed company headquarters whose “value is currently higher than Turkish Airlines and Aselsan”, Türkiye’s largest defense electronics firm.
Gaza is suffering the world’s worst economic crisis ever recorded, with nine in 10 businesses destroyed and hundreds of thousands of people unemployed, a top U.N. development agency warned Thursday.
Israel’s genocidal military campaign devastated the Palestinian enclave of two million people before a patchy cease-fire was announced in October 2025.
“The collapse of the economy of Gaza is the world’s most severe economic crisis on record,” said Pedro Manuel Moreno, acting secretary-general of the U.N. Conference on Trade and Development (UNCTAD).
“It has wiped out decades of development and generated an acute economic crisis for its people,” he told reporters in Geneva as the organization released a new report.
It said 92% of Gaza’s “economic establishments have been damaged or destroyed.”
The territory’s daily per capita GDP is $0.58 a day, the report said. Prices are 274% higher than in 2022.
Israel’s attacks killed more than 73,000 people, according to the territory’s health ministry, whose figures are regarded as reliable by the United Nations.
It displaced virtually the entire population and damaged or destroyed most of its buildings.
‘Everyone in Gaza multidimensionally poor’
Before Israel’s campaign started in October 2023, “two out of three Gazans were poor. Today, everyone in Gaza is multidimensionally poor,” said Mutasim Elagraa, UNCTAD’s coordinator for assistance to the Palestinians.
Industrial activity and agricultural production have fallen by 94%, with only 1.5% of arable land accessible, forcing “total dependence on humanitarian food aid,” Elagraa said.
According to the report, the conflict has destroyed hundreds of thousands of jobs, leaving more than 90% of Gaza’s working-age population unemployed.
The report also detailed an economic and financial crisis in the occupied West Bank, citing “reduced access to land and natural resources linked to (Israeli) settlement expansion.”
The Palestinian government has borrowed heavily from local banks, drawn on the Palestinian pension fund and owes money to private contractors, Elagraa said.
The Palestinian territories risk a “banking collapse,” he warned. The “political and social and humanitarian consequences will be immense.”
President Recep Tayyip Erdoğan expressed confidence Thursday that Ankara would regain access to the U.S. F-35 fighter jet program, saying he expected “concrete” steps from Washington to that end.
U.S. President Donald Trump “expressed a positive willingness regarding Türkiye’s return to the F-35 program,” Erdoğan told reporters before boarding the plane to return from the U.N. General Assembly in New York.
“We expect this willingness to now translate into concrete steps,” he added.
“We are continuing our discussions on this matter. I am confident we will achieve results.”
Türkiye has long sought to resolve the long-running F-35 dispute with Washington, and the Trump administration has also shown willingness to draw a line under the matter.
In 2019, the U.S. removed Türkiye from the F-35 program, where Ankara was also a production partner, following its purchase of the S-400 systems from Russia. It later also imposed sanctions on its NATO ally.
Washington claimed the system would endanger the jets and is incompatible with NATO systems, while Ankara has repeatedly said there is no conflict between the two and has proposed a commission to study the issue.
Türkiye also said it fulfilled its obligations on the F-35s and that its suspension broke the rules.
At the NATO summit in Ankara in early July, Trump said he would lift U.S. sanctions and signaled a willingness to sell F-35 jets to Türkiye.
“We’re going to be taking the sanctions off,” Trump said. “It’s time. We don’t want to sanction friends.”
The European Bank for Reconstruction and Development (EBRD) expects Türkiye’s economy to expand by 3.0% in 2026, down from a 3.5% forecast made in June, the bank said in its new report published Thursday.
Growth is projected to accelerate to 4.0% in 2027, the bank said in its latest Regional Economic Prospects (REP) report.
The downward revision reflects weaker domestic demand amid elevated inflation and tight financial conditions, as well as the continuing impact of the conflict in the Middle East.
Growth is slowing across a range of emerging market nations, with economies in Iraq, Lebanon and Ukraine hamstrung by the effects of war, according to the development bank.
High energy prices, rising borrowing costs and issues ranging from drought in Europe to the ongoing closure of the Strait of Hormuz are combining to depress economic growth, the EBRD regional economic outlook found.
Across the 40 economies it covers, the EBRD expects growth of 2.5% this year, 0.6 percentage points below its June forecast and its second consecutive downgrade.
“What’s a cause for concern is that there are multiple pressure points, from diesel to cost of wheat to cost of borrowing,” EBRD chief economist Beata Javorcik said.
“Pressures are building up, and there are considerable downside risks to our forecast.”
The bank also warned about wheat prices and exports from Ukraine.
Wheat prices globally are up roughly 30% since February as Black Sea attacks cut Ukrainian exports to the lowest level since April 2022, Javorcik said.
Elevated wheat prices threaten food-importing economies, particularly countries such as Egypt that heavily subsidize bread and grain products. Russia and Ukraine combined account for roughly a quarter of global wheat exports.
The U.S. and China have agreed to extend a bilateral trade truce that would have expired in November for another two months, U.S. Treasury Secretary Scott Bessent said Wednesday as Chinese President Xi Jinping arrived for talks with President Donald Trump.
“We will extend what we call the Busan Agreement – the economic detente between the two countries that was scheduled to end on Nov. 10. That is going to be extended until Jan. 10,” Bessent said in an interview with Fox News.
“There are some deliverables that have not been perfect on the Chinese side, so we also want to see – now that we’ve sat down and told them our expectations – if over the coming months, they could be a bit more fulsome in enacting the agreement,” he added.
Bessent also hinted that there could be further announcements in the coming days from the Chinese delegation, such as agreements to buy more U.S. agricultural products and potential deals in the financial services sector.
Iranian airlines were forced to cancel some international flights Wednesday after the U.S. tightened sanctions on Iran’s aviation industry in a new effort to cripple its economy.
Separately, Tehran later Wednesday threatened to paralyze airports in neighboring countries if they cooperate with the U.S. by disrupting Iranian flights.
U.S. Treasury Secretary Scott Bessent said Monday that all Iranian airlines would be forced to stop operating Wednesday by the threat of secondary sanctions on air services providers, seven months into the war between the U.S. and Iran.
A travel agent in Tehran told Agence France-Presse (AFP) that flights to Baghdad, Muscat, Qatar, Georgia and Azerbaijan had all been suspended, but routes to multiple other destinations remained available, including China.
The new U.S. measures came as part of an earlier threat by the Trump administration to impose “economic D-Day” on Iran in an attempt to force it into submission.
But Iran’s aviation sector has already been a target of sanctions for years, and it remains unclear what the full impact will be and which other countries will comply.
Tehran issues threat
Even after the new sanctions took effect Wednesday, a flight from Tehran operated by Mahan Air, one of Iran’s biggest carriers, landed in Guangzhou in China, according to tracking data from FlightRadar24.
China said Tuesday that it opposed the U.S. sanctions, calling them illegal. A flight to Shanghai was also due to depart Wednesday, according to Tehran’s international airport.
Some flights to Istanbul were also scheduled, though others had been canceled, the travel agent in Tehran told AFP.
“The situation is unstable and we are no longer selling tickets for the time being for fear of cancelations,” the agent said, requesting anonymity.
A Mahan flight from Kabul was also expected to arrive in Tehran. According to the website for Tehran’s international airport, other connections to Türkiye and Armenia remained possible using smaller Iranian airlines, including Varesh.
Flights to Najaf in Iraq and Dubai in the United Arab Emirates (UAE) were also scheduled.
Bessent had vowed Monday to “shut down” Iranian carriers and punish anyone doing business with them.
“If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets or you will be knocked out of the dollar system,” he warned other countries.
The restrictions will further complicate the ability of Iranians to travel abroad or return to their country.
If neighbouring countries cooperate with the U.S. by stopping Iranian flights, Iran will ensure their airports cannot function, Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Wednesday in an interview with state TV.
Pilgrims
Iranian media also reported cancelations, with the Tasnim news agency Tuesday citing a civil aviation spokesperson as saying that Baghdad and Muscat airports “will no longer accept” Iranian flights.
The agency added that “other international flights, including Istanbul, will operate as scheduled.”
According to Tasnim, Iran’s aviation authorities were in talks to reroute Baghdad flights to Najaf, a major destination for Iranian pilgrims.
On Wednesday, the agency said its correspondent in Najaf had reported Iranian flights to the city were running as normal.
It quoted a source at the airport as saying no order had been received from Iraqi authorities to halt flights.
While the Iraqi government has not publicly announced plans to enforce the ban, several sources, including a senior government official, told AFP that Baghdad would comply with the U.S. measures.
The prospect of a suspension of flights between the two countries has sparked concerns among some Iraqi travel agents.
In Najaf, home to one of the most revered Shia Muslim shrines, agent Haidar Shamaa said “most travel companies in the city depend on booking flights” to Iranian airports.
Several travel agencies said panicked clients were calling for updates and were considering switching to land routes, which would mean much longer journeys.
Chinese tech giant Alibaba unveiled plans Wednesday to expand its overseas data centers, targeting markets across Europe and the Middle East.
Hangzhou-based Alibaba is one of the frontrunners in China’s artificial intelligence industry, with its Qwen model among the world’s most downloaded AI models.
The company said it would “establish its first cloud regions” in Türkiye, Finland and the Netherlands, while “expanding its data center footprint in Malaysia, Germany, the United Arab Emirates (UAE), France and Hong Kong” over the next 12 months.
The announcement came ahead of a highly anticipated meeting between Chinese President Xi Jinping and his U.S. counterpart Donald Trump in Washington, where the two leaders are expected to discuss trade tensions, among other topics.
Beijing and Washington are locked in a tech rivalry increasingly centered on frontier industries including semiconductors, AI and robotics.
Alibaba CEO Eddie Wu said Tuesday that the company was planning to train an AI model with five to 10 trillion parameters, which would make it several times bigger than the current largest Chinese model.
Alibaba is targeting more than 20 gigawatts of global data center capacity by 2032, Wu said during the firm’s annual flagship conference in Hangzhou.
The company also unveiled a new AI chip at the conference, the Zhenwu V900 – which it said would deliver three times the performance of its predecessor, Zhenwu M890.
“It’s the most powerful AI chip in China today,” Wu said.
The Zhenwu M890 is widely believed to be two times more powerful than the chip custom-made for the Chinese market by U.S. pace-setter Nvidia, the H20.
Washington has long tried to slow China’s progress with export controls on the advanced chips needed for cutting-edge AI, blocking access to top-end U.S. semiconductors such as Nvidia’s.
Beijing’s push for technological self-reliance has also encouraged Chinese technology companies to adopt domestic chips as alternatives to foreign products.
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