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.
class=”cf”>
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.
class=”cf”>
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.
World food prices climbed in April to their highest in more than three years, with vegetable oils particularly elevated due to the Iran war and the effective closure of the Strait of Hormuz, the United Nations Food and Agriculture Organization (FAO) said on Friday.
FAO Chief Economist Maximo Torero said vegetable oil prices are being driven by elevated energy costs that are in turn raising demand for biofuels made using organic materials, such as oil-rich plants.
He added, however, that despite war-linked disruptions, agri-food systems were showing resilience, with cereal prices having increased only moderately thanks to adequate supplies from previous seasons.
The FAO Food Price Index, which measures changes in a basket of globally traded food commodities, rose for a third consecutive month in April to average 130.7 points, the U.N. agency said, up 1.6% from its revised March level and the highest since February 2023.
The index hit a peak of 160.2 in March 2022 after the start of the Ukraine war.
The FAO’s April vegetable oil price index rose 5.9% month-over-month to its highest since July 2022 as a result of increased soy, sunflower, rapeseed oil and palm oil prices, the latter, notably, underpinned by biofuels policy incentives.
By contrast, April cereal prices rose just 0.8% from March and were up 0.4% from a year ago, reflecting modestly higher prices for the likes of wheat and maize linked to weather concerns, rising fertiliser costs and increased biofuels demand.
There are expectations for reduced 2026 wheat plantings, the U.N. agency said, as farmers shift to less fertilizer-intensive crops, given prices for the inputs have surged.
Elsewhere, April meat prices rose 1.2% month-over-month to a record high amid limited slaughter-ready cattle in Brazil, the FAO said, while sugar dropped 4.7% thanks to forecasts for ample supply in Brazil, China and Thailand.
In a separate report, the FAO slightly raised its 2025 global cereal production estimate to a record 3.040 billion metric tons, 6% above levels seen in the prior year.
One of the top Turkish business associations is ramping up its public diplomacy campaign and on Friday urged German Chancellor Friedrich Merz and other European leaders to revive Türkiye’s stalled European Union membership process.
“A strong Europe is impossible without Türkiye,” the Foreign Economic Relations Board (DEIK) said in a full-page open letter this week in the German newspaper Bild.
That marks the second phase of DEIK’s broader initiative timed around Europe Day. The campaign follows similar appeals published in the Financial Times in January.
DEIK says its diplomatic and commercial initiatives aim to re-energize Türkiye’s relations with the bloc, including efforts to resolve longstanding visa issues and modernize the customs union agreement.
The board called for a “paradigm shift” after years of stalled accession talks, arguing that Türkiye’s integration into the EU’s economic security and defense architecture has become a strategic necessity amid challenges including migration, demographic change, the rapid spread of artificial intelligence and the energy transition.
The letter also described Türkiye’s full integration as essential for the EU to emerge as a global power, citing what it called Merz’s visionary approach at the Munich Security Conference.
It emphasized that the Turkish business community has long been integrated into European value chains and argued that providing a credible path toward EU membership would help restore strategic clarity and mutual trust between Brussels and Ankara.
For decades, Türkiye and the bloc have enjoyed good trade ties and cooperation on migration. However, relations have been strained over multiple issues, including the prolonged process of expansion of the scope of the customs union agreement, maritime issues with Greece and Greek Cyprus, and EU policies on Syrian refugees.
On the other hand, Russia’s invasion of Ukraine has pushed the European Union to seek deeper security ties with Türkiye, a NATO ally and long a candidate to join the 27-nation bloc.
DEIK also called on the urgent modernization of the EU-Türkiye Customs Union, saying it is critical to strengthening Europe’s competitiveness amid increasing geopolitical fragmentation.
A host of disagreements over recent years have stalled the negotiations for updating the trade agreement. The deeper 1990s-era deal would be expanded to services, farm goods and public procurement. The current deal only covers a limited range of industrial products.
First implemented in 1995, the Türkiye-EU Customs Union has helped boost economic ties. But business groups have long argued that the agreement is outdated and ill-suited for today’s trade environment.
Mehmet Ali Yalçındağ, chair of DEIK’s Türkiye-Europe Business Council, said the campaign would expand with similar open letters in major newspapers across France, Italy, Belgium and the Netherlands.
“We deem the future of Türkiye-EU relations as not just an economic partnership but a strategic necessity,” he said.
Yalçındağ added that the group would continue outreach efforts with universities, civil society organizations and think tanks to promote its vision among stakeholders.
Türkiye’s defense industry has transformed into an ecosystem that is sought after, trusted and preferred not only in its region but also globally, President Recep Tayyip Erdoğan said Friday.
Erdoğan called Türkiye “undoubtedly one of the founding actors” of the new era, where he says conventional power elements are being replaced by multilayered and integrated systems.
He was speaking at the SAHA 2026 defense trade show, which serves as a primary platform for showcasing Türkiye’s domestic defense capabilities and has, over the years, seen billions of dollars added to the country’s defense exports.
“Türkiye has proudly inscribed its name among the countries whose stars are shining brightly on a global scale in the fields of defense, aviation and space,” Erdoğan said.
In recent years, NATO member Türkiye significantly ramped up its defense industry production.
It has injected billions of dollars to transform from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a major NATO member.
The country currently exports more than 230 defense systems to 185 countries.
Since it started on Tuesday, the SAHA fair has seen the signing of 182 agreements with a total business volume of $8 billion (TL 362.92 billion), Erdoğan said.
“Agreements directly aimed at exports accounted for $6 billion of this figure,” he added.
Placing Türkiye among top exporters
Türkiye’s defense exports rose about 48% year-over-year in 2025 to a record of more than $10 billion.
Erdoğan said the goal is to lift this figure to $11 billion in the near term, placing Türkiye among the world’s top 10 biggest defense exporters.
The fair, organized by SAHA Istanbul, Türkiye’s and Europe’s largest defense, aviation and space industry cluster, was launched in 2018 when it hosted 180 companies from 12 countries.
The trade show has since expanded to host more than 120 countries and over 100,000 visitors.
More than 1,760 companies attended this year’s edition, including 1,500 Turkish and 263 foreign firms, Erdoğan said.
Over 200 products were showcased for the first time, he added.
“When we look at the big picture, the landscape we encounter is exactly this: the Turkish defense industry has become an ecosystem that is sought after, trusted, closely watched, and preferred not only in its region but on a global scale,” said Erdoğan.
“Behind this portrait of success lies, without a doubt, the labor of decades and the hard work of hundreds of thousands of our people who have worked with a dedicated spirit, giving their all day and night.”
Achieving this “was certainly not easy,” said Erdoğan.
“We faced countless obstacles; they tried to block our path with embargoes. We were even subjected to betrayal and conspiracies from within.”
Turkish companies have signed nearly $8 billion in export contracts during the first three days of a major defense trade show, a senior official said on Friday.
Officials had expected that volume to be reached during the whole SAHA 2026 fair, which started on Tuesday and runs through Saturday.
The expo serves as a primary platform for showcasing Türkiye’s domestic defense capabilities and has, over the years, seen billions of dollars added to the country’s defense exports.
“At SAHA 2026, as a country, we achieved a historic record,” Haluk Bayraktar, chair of the SAHA Istanbul, Europe’s largest defense, aviation, and space industry cluster, said.
“In the first three days of the fair, our companies signed nearly $8 billion in export contracts,” Bayraktar wrote on the social media platform X.
In recent years, NATO member Türkiye significantly ramped up its defense industry production.
It has injected billions of dollars to transform from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a major NATO member.
The country currently exports more than 230 defense systems to 185 countries.
Türkiye’s defense exports rose about 48% year-over-year in 2025 to a record of more than $10 billion. The goal is to lift the full-year figure to $11 billion, placing Türkiye among the world’s top 10 biggest defense exporters, according to officials.
Contracts signed in the first four months of this year approached $7 billion, according to authorities.
Türkiye could sign a new liquefied natural gas (LNG) agreement with Algeria this year as it looks to renew and potentially expand its existing long-term gas supply contract, Energy and Natural Resources Minister Alparslan Bayraktar said on Friday.
The remarks came on the sidelines of Algerian President Abdelmadjid Tebboune’s visit to Ankara, where he, along with President Recep Tayyip Erdoğan, oversaw the signings of multiple agreements between the two countries.
Bayraktar said Türkiye and Algeria discussed broader energy cooperation, including LNG trade as well as oil and natural gas exploration activities.
“We hope to conclude a new agreement within this year,” he said, noting the current deal expires in September 2027.
Türkiye currently imports 4.4 billion cubic metres (bcm) of LNG annually from Algeria under the existing contract.
But Bayraktar said Ankara was open to increasing that volume to 6-6.5 bcm. He added that Türkiye was prepared to extend the new contract for five to 10 years.
“Europe cannot offer Algeria a long-term commitment, but we told them: don’t worry, we can,” he said.
Bayraktar also said the two countries were discussing a project under which Algerian LNG shipped to Türkiye could be regasified at Turkish facilities and partially exported onward to southeastern Europe, particularly via Bulgaria.
“The first step is for LNG to arrive in Türkiye. In the second phase, part of this LNG could be regasified at our facilities and transported to Europe,” he said.
Bayraktar said Türkiye expected its energy partnership with Algeria to deepen further through joint hydrocarbon exploration initiatives.
He said Türkiye’s state energy company, Turkish Petroleum Corporation (TPAO), was in talks with Algeria’s state-owned energy firm Sonatrach on potential joint oil and natural gas exploration projects in Algerian waters using Türkiye’s seismic and drilling vessels.
“One of the important agenda items was cooperation between TPAO and Sonatrach, using our seismic and drilling vessels to explore oil and natural gas in Algerian waters,” Bayraktar said.
President Donald Trump said on Thursday he was giving the EU until July 4 to fulfill its side of last year’s trade deal, threatening to hike U.S. tariffs to “much higher levels” if the deadline is not met.
Trump’s remarks came following what he described as a “great call” with European Commission President Ursula von der Leyen.
“I’ve been waiting patiently for the EU to fulfill their side of the Historic Trade Deal we agreed in Turnberry, Scotland, the largest Trade Deal, ever!” he said in a post on Truth Social.
“A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO! I agreed to give her until our Country’s 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels.”
The July 4 holiday this year marks 250 years since the American colonies declared independence from British rule.
Trump on Friday had threatened to increase tariffs on EU cars and trucks to 25% this week, from 15% currently, accusing the bloc of not complying with the terms of the deal struck last July.
The EU’s implementation of the deal had slowed amid frustration over other tariff threats by Trump, including in disputes linked to his bid to annex Greenland, and legal uncertainty following a U.S. Supreme Court ruling that found many of his existing tariffs unlawful.
In late March, EU lawmakers gave their green light to the agreement, but they also sought additional safeguards.
Despite conditional approval by the European Parliament, the deal must be negotiated with EU states before it can be implemented by the bloc.
-
Daily Agenda3 days agoSelçuk Bayraktar: “Turkish armies made history with UCAVs in the world”
-
Daily Agenda3 days agoBINDING SERVICE WILL BE PROVIDED – Official Announcement News
-
Politics3 days agoTürkiye in focus as Greek Cyprus pushes EU defense clause
-
Politics3 days ago‘Türkiye-Armenia normalization offers model for regional peace’
-
Economy3 days agoTurkish company signs deal to export 100,000 kamikaze drones
-
Economy3 days agoTAI, GE Aerospace ink F404 engine deal for Türkiye’s advanced jet trainer
-
Daily Agenda3 days agoBUILDING WORKS WILL BE DONE – Official Announcement News
-
Economy3 days agoTürkiye’s CBRT says Iran war-driven pressures to persist in short term