Economy
Inflation expectations for end of 2025 improve, shows survey
ANKARA
Inflation expectations for the end of 2025 declined from a previous 28.3 percent to 28.04 percent, a Central Bank survey showed on March 7.
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Türkiye’s annual inflation rate eased for the ninth consecutive month in February, slowing to 39.05 percent, with consumer prices rising 2.27 percent month-on-month.
Consumer prices are forecast to rise by 2.27 percent in March, and 2.25 percent in April, according to the survey.
The 12-month ahead inflation expectations also improved, falling from 25.26 percent to 24.55 percent.
In February, the Central Bank lifted its annual consumer inflation forecast for 2025 from the previous 21 percent to 24 percent, while keeping its forecast for 2026 unchanged at 12 percent.
The 24-month ahead inflation expectations declined from 17.26 percent to 17.06 percent.
As inflation continued to decline, the Central Bank lowered its key interest rate by a further 2.5 percentage points on March 6.
The bank’s Monetary Policy Committee said it was reducing its benchmark one-week repo rate from 45 percent to 42.5 percent.
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It was the bank’s third rate cut in a row.
“Considering the risks to the inflation outlook, we continue to think that the total [rate] cuts for the year could be more limited than markets expect,” Haluk Bürümcekçi, an economist, told state-run Anadolu Agency agency, commenting on this week’s interest rate reduction.
While the committee retained its positive evaluations regarding the inflation trend, it preferred a more cautious tone of the growth outlook, Bürüncekçi said.
Participants of the Central Bank’s survey lifted their GDP growth expectations for 2025 from a previous 3 percent to 3.1 percent, while increasing growth forecasts for 2026 from 3.9 percent to 4 percent.
The Turkish economy expanded by 3.2 percent last year to reach a size of $1.32 trillion, after growing 5.1 percent in 2023.
The current account balance is expected to post a deficit of $19.4 billion at the end of this year, an upward revision from the previous $18.8 billion, showed the survey. But participants’ current account deficit forecasts for 2026 improved from $24.6 billion to $24.49 billion.
The Central Bank’s Market Participants Survey monitors the expectations of experts and decision-makers from financial and real sectors related to various key economic variables.
SoftBank Group sank into losses for the latest quarter, the Japanese technology company reported Tuesday, as worries about investments in artificial intelligence hurt its bottom line.
Tokyo-based SoftBank Group Corp. racked up a 1.1 trillion yen ($7 billion) loss for the three months through September, a reversal from the 2.5 trillion yen in profit the same period a year earlier. Quarterly sales rose 16% to 2.2 trillion yen from 1.9 trillion yen.
Analysts say the financial results for a company like SoftBank Group are difficult to predict as it invests in a variety of other companies, including OpenAI and Arm Holdings , whose fortunes tend to be volatile.
Founded by Masayoshi Son, SoftBank was an early investor in internet technology, and has focused on companies related to AI, telecommunications, robotics and e-commerce. It runs a series of investment funds called Vision Fund that center around a portfolio of various technology companies, including startups.
Son, a graduate of the University of California, Berkeley, boasts a wide circle of friends among American entrepreneurs including Microsoft Corp. co-founder Bill Gates and Apple co-founder Steve Jobs. That is relatively unusual for a businessperson in Japan.
Son also has a highly public friendship with Nvidia Chief Executive Jensen Huang. Son had sold his shares in Nvidia before the revelations of Huang’s affair with an alleged Chinese government agent, which Nvidia officials and other authorities said was being investigated.
“I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape,” U.S. President Donald Trump said at a White House briefing on Monday.
The disclosure has renewed concerns about whether China has been able to access Nvidia AI chips.
SoftBank Group stocks, which have lost about a third of their value over the last year, closed nearly 14% higher in Tokyo trading Tuesday, before the earnings results were released.
China’s trade surplus exceeded $1 trillion for a second straight year, according to official data released Tuesday, as pressure mounts for greater balance in trade with Beijing.
Exports in October surged 35.2% from a year earlier, the customs agency said. Exports have grown rapidly this year, supported by high-tech goods like semiconductors and autos.
Imports rose 41.6% year-on-year.
Between January and October, China logged a $1.04 trillion trade surplus, even as the trade surplus narrowed last month to $105.3 billion from $133.5 billion in September as imports picked up pace.
That puts China on track for surpassing last year’s record $1.2 trillion trade surplus in 2026.
“We expect Chinese exports to stay strong for the rest of this year, led by electronics and autos,” said Dave Chia, an economist at Moody’s Analytics.
China’s imports soared in October partly because of a recovery in shipments of crude oil from the Persian Gulf.
Overcapacity in many industries, excess domestic savings and weakened domestic demand are still leading China to ship its goods abroad as some countries move to protect their own industries, said Alicia García-Herrero, chief economist for Asia Pacific at French bank Natixis.
The situation is not sustainable, she said.
Businesses are feeling the pressure of ferocious competition as China’s economy has slowed, said Cinders Zhou, who sells eyewear for a manufacturer in Linhai city in eastern China’s Zhejiang province.
“It comes down to product quality, or rather the increasing lack of it across the industry, since there’s significant homogenization,” said Zhou, whose company makes frames and lenses sold both in and outside China. “That has forced everyone to compete on price,” she said.
Trade curbs by the European Union pose an important risk at a time of heightened U.S. trade barriers and tariffs, Chia said.
Still, the EU’s trade measures apply to only a small part of China’s exports, said Nguyen Hoang Nam with Capital Economics.
China has insisted it is not seeking to expand its surplus but wants more balanced global trade.
However, strong exports have helped offset sluggish domestic demand. The economy is forecast to meet Beijing’s official target of a 4.5% to 5% annual growth this year, slightly slower than last year’s 5% expansion.
China’s exports to the U.S. grew 32.9% in October year-on-year, building on a low base after China-U.S. trade was hit last year by Trump’s elevated tariffs. China’s exports to the EU in October rose 24.3% year-on-year. They rose 17.2% in January-October.
For the first ten months, the trade surplus with the U.S. was around $266.5 billion, while for the EU, the 10-month difference was more than $310 billion. In 2025, the EU recorded a roughly $410 billion trade deficit with China, or more than $1.1 billion each day.
Figures reported by China often differ from those reported by its trading partner.
Also in October, China’s semiconductor exports soared 137.1% in terms of value from the year before. Exports of autos rose 37.6%.
China’s exports could be vulnerable to setbacks for the artificial intelligence industry, a concern that deepened with the Democratic victories in the U.S. midterm elections given the public backlash against expansion of data centers.
“If the AI boom slows or turns into a correction, lower chip and electronics prices and smaller shipping volumes would hit China’s exports hard,” Chia said.
Trade is likely to be among top issues on the agenda in planned meetings between U.S. President Donald Trump and Chinese leader Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation leaders summit in China’s technology hub Shenzhen.
A two-month extension of a trade truce until January has provided some relief to exporters, though it’s unclear how long that may last.
U.S. and European trade policies have added “a lot of difficulties” for Chinese businesses to expand in the markets, said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, an industry group.
Türkiye updated its Green Deal Action Plan for 2026-2030 to strengthen its integration into global green supply chains and align it with its customs union agreement with the European Union, according to the Official Gazette on Tuesday.
The five-year strategic framework, signed by President Recep Tayyip Erdoğan, aims to establish global collaborations for the efficient reuse of natural resources.
The update comes as green transition efforts accelerate worldwide, with the U.N. and the EU establishing policies governing the circular economy and industrial decarbonization.
The circular noted that Türkiye has made significant progress in climate legislation and carbon pricing, while “boosting renewable energy capacity, transitioning to a circular economy, and promoting sustainable production practices.”
The new five-year framework is built on a twin transition approach addressing green and digital transformations simultaneously.
The newly established Green Deal Working Group will be chaired by the Trade Ministry or a designated deputy to monitor and evaluate implementation alongside high-level representatives from relevant ministries.
All relevant public institutions will be required to submit annual progress reports for the specific actions under their responsibility.
Industrial production in Türkiye rebounded in September, increasing on both a monthly and annual basis, official data showed on Tuesday, amid particularly strong output in high-tech manufacturing.
Industrial output increased by 2.6% year-over-year in September, recovering from a 1.7% contraction registered in August, according to the Turkish Statistical Institute (Turkstat).
The manufacturing index rose 2.6% and the mining and quarrying index increased 1.2% on an annual basis.
The electricity, gas, steam, and air conditioning supply index posted the strongest annual gain among major subsectors at 4%.
High-technology output surged 31.1% year-over-year, while capital goods production climbed 7.2% and energy rose 3.9%, the data revealed.
The annual gain of 2.6% marked the best reading since April, when the index surged 6.1% yearly. The period from May through August was marked by contraction.
Monthly, industrial production expanded 2.1% in September, reversing a 0.9% decline recorded in August.
Month-over-month, manufacturing output grew 2.3%, mining and quarrying rose 1.1%, and electricity, gas, steam, and air conditioning supply edged up 0.1%.
High-technology manufacturing jumped 26.1% from the previous month, while capital goods rose 8.2% and energy declined 1.1%.
President Recep Tayyip Erdoğan said Monday that Türkiye’s efforts to eliminate terrorism would pave the way for a major economic breakthrough, unlocking new opportunities in tourism, trade and investment across all 81 provinces.
Speaking after a Cabinet meeting at the Presidential Complex in Ankara, Erdoğan described the “Terror-Free Türkiye” initiative as a strategic project extending far beyond security, saying its successful implementation would accelerate development nationwide.
“When the shadow of terrorism is completely lifted, our cities that have suffered for years under the pressure of migration and insecurity will rise again,” Erdoğan said.
He said eastern and southeastern provinces, including Hakkari, Şırnak, Van, Bitlis, Diyarbakır, Mardin and Ağrı, could attract greater international attention for their historical and natural attractions, much like Istanbul and Antalya.
Erdoğan stressed that the economic benefits of ending terrorism would not be limited to regions directly affected by decades of insecurity but would extend to all 86 million citizens.
“That is when Türkiye will make its greatest economic leap,” he said, pointing to the potential for expanded tourism, stronger trade and increased investment.
Describing the initiative as a cornerstone of the government’s vision for a stronger Türkiye, Erdoğan reaffirmed his determination to complete the process through dialogue, common sense and broad public consensus.
“There is no turning back from this path, which ultimately leads to peace, prosperity, brotherhood and development,” he said.
Erdoğan also highlighted developments in Iraq’s Sinjar region, saying the integration of more than 4,000 armed group members into Iraqi security forces had begun the previous week, alongside progress in clearing militant hideouts.
Energy discoveries bolster growth ambitions
Turning to energy security, Erdoğan announced new oil discoveries in two fields in southeastern Türkiye’s Gabar region, where production began in October.
The Gaziler and Çardaklı fields have an estimated combined potential of 135 million barrels of oil in place, he said.
Daily production in Gabar has reached 84,000 barrels from 184 wells, with output expected to surpass 100,000 barrels from approximately 230 wells in the second half of 2027.
Erdoğan said production of 120,000 barrels per day would generate an estimated $4.4 billion in annual economic value at current prices.
He also noted that natural gas extracted from the Black Sea currently meets the needs of 4 million households, with plans to double that capacity through the Osman Gazi floating production platform.
Despite regional instability and disruptions to global energy supplies, Erdoğan said Türkiye remained committed to economic growth through diversified energy sources, domestic production and active energy diplomacy.
He reiterated the government’s targets of raising exports to $300 billion and tourism revenues above $70 billion, emphasizing that greater security and stability would support the country’s long-term development ambitions.
The D-8 Organization for Economic Cooperation and Malaysia discussed expanding trade, investment and financial cooperation during high-level talks in Istanbul, as the bloc seeks to boost trade among its members to $500 billion by 2030.
D-8 Secretary-General Sohail Mahmood met Malaysian Deputy Prime Minister Ahmad Zahid Hamidi on the sidelines of the 10th TRT World Forum, held Nov. 6-7 under the theme “A World Without a Center: Who Leads When the Rules Run Out?”
The meeting focused on strengthening economic integration among D-8 members, removing non-tariff trade barriers, improving financial connectivity and encouraging greater private-sector participation, according to a statement issued by the organization.
Both officials explored cooperation in food security, vocational training, small and medium-sized enterprises and rural development, with an emphasis on entrepreneurship, workforce skills and inclusive economic growth.
Hamidi proposed deeper collaboration in the halal economy and trade, alongside potential partnerships through the International Zakat Organisation to support poverty reduction and socioeconomic development.
Mahmood emphasized the need to accelerate implementation of the D-8 Preferential Trade Agreement and advance the organization’s 2020-2030 roadmap, particularly its goal of increasing trade among member countries to $500 billion by the end of the decade.
He also highlighted opportunities to strengthen economic ties between the D-8 and the Association of Southeast Asian Nations (ASEAN), citing Malaysia’s regional connections and economic capabilities.
The secretary-general praised Malaysia’s contributions as a founding D-8 member and stressed the importance of drawing on its expertise to advance the bloc’s economic agenda.
Looking ahead, Mahmood identified the upcoming 12th D-8 Summit in Indonesia and the organization’s 30th anniversary in 2027 as opportunities to deepen cooperation and raise its international profile.
The two-day TRT World Forum, inaugurated by President Recep Tayyip Erdoğan, brought together political leaders, diplomats, academics and experts to discuss global security, geopolitical shifts, economic challenges and emerging technologies.
During the event, Mahmood also held brief exchanges with several senior officials and international figures, including Turkish Foreign Minister Hakan Fidan, Industry and Technology Minister Mehmet Fatih Kacır and Nigerian Information Minister Mohammed Idris Malagi.
The D-8 said the engagements reflected its broader efforts to expand international partnerships, strengthen multilateral cooperation and promote sustainable economic development.
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