Economy
Construction powers Türkiye’s 2025 growth, momentum seen continuing
The construction sector made the largest contribution to Türkiye’s economic growth in 2025 thanks to housing production, urban transformation projects and infrastructure investments, sector representatives said, adding that they expect this momentum to continue this year.
The Turkish economy grew by 3.6% last year, according to official data, being supported by the economic program implemented and maintaining expansion momentum despite tighter monetary conditions.
Like this, Türkiye ranked among the three fastest-growing economies among member countries of the Organisation for Economic Co‑operation and Development (OECD).
When the activities forming gross domestic product (GDP) are examined, the activity in the construction sector grew by 10.8% in 2025 compared with the previous year. It was the sector with the highest growth last year.
Sector representatives suggested the data once again reveals the increasing momentum in construction, noting that the surge in housing production, urban transformation and infrastructure investments has also made a significant contribution to the national economy.
Neşecan Çekici, head of the Real Estate Investors Association of Türkiye (GYODER), recalled in a statement that construction was among the sectors contributing most to economic growth.
“This development clearly shows that the sector has once again become one of the main drivers of growth,” she told Anadolu Agency (AA), according to remarks published on Sunday.
“Construction has a multiplier effect that activates a very broad ecosystem simultaneously, including cement, iron and steel, ceramics, glass, paint, furniture, logistics, architecture and engineering, finance, insurance and real estate services,” Çekici continued.
“For this reason, the acceleration in construction spreads across many areas of the economy, from industry to services, and from employment to tax revenues,” she suggested.
Çekici also noted that the number of salaried employees in the construction sector rose from 1.8 million to 2 million over the past year.
At the same time, she pointed out that reconstruction efforts in earthquake-hit regions, urban transformation projects and infrastructure investments have helped keep production capacity and supply chains active through public-private cooperation.
“However, for sustainability, not only increased production but also access to financing, cost stability and predictable licensing and planning processes must be strengthened simultaneously,” she said.
Growth expected to continue
Furthermore, Çekici said the sector’s contribution to growth is expected to continue this year as well, although the continuation of momentum will depend on financial conditions. She added that in 2026, housing projects that are high-quality, located in the right areas and aligned with real demand will stand out.
She also pointed to several factors that would determine the sector’s trajectory this year, citing them as including improved access to credit and financing, easing volatility in input costs and labor costs, and ensuring that urban transformation expands with a focus on “quality and resilience.”
Access to financing
Ziya Yılmaz, chairperson of the board of the Housing Developers and Investors Association (KONUTDER), similarly said that the construction sector’s 10.8% growth last year once again demonstrated its multiplier effect and strategic importance.
He emphasized that the comprehensive reconstruction process in earthquake-affected regions is being carried out on a scale that could set a global example.
Yılmaz also said that the construction sector does not only mean housing production but that it directly affects around 250 sub-sectors, making it one of the sectors with the broadest impact on employment, production and tax revenues.
“Our sector continues to make a strong contribution to the economy through both reconstruction in earthquake-affected areas and production activity across the country. However, in order for this contribution to turn into a sustainable locomotive effect, improving access to financing and supporting production continuity are of great importance,” he furthered.
Yılmaz added that whether last year’s momentum can be sustained in 2026 will depend not only on domestic demand dynamics but also on global economic developments and geopolitical developments in the surrounding region.
He said Türkiye retains its potential thanks to its strong production capacity and dynamic housing demand.
Noting that the increase in building permits last year needs to translate into accelerated production, he said land and financing policies should be addressed together.
Safest haven in the region
Engin Keçeli, chairperson of the Association of Construction Contractors and Real Estate Developers (INDER), said they were proud that the construction sector made the largest contribution to growth in 2025.
“This year will be much better. We never wish for instability in our region, but the whole world has seen that Türkiye is the safest haven in this region,” he said.
“The value of our country is being recognized again. For this reason, we believe 2026 will be better than 2025,” he added.
Pointing out that infrastructure investments in Türkiye have always continued, he went on to stay they have managed to recently overcome the slowdown experienced in housing production in previous years.
“The increase in new building permits this year indicates that housing production will continue. Because demand is high, we are obliged to increase supply. This will automatically bring growth,” he said.
Mustafa Ekiz, head of the Real Estate and Construction Platform, said that for Türkiye’s economic growth to continue this year, sectors outside construction must also come into play.
He noted that this would improve the quality of economic growth while supporting employment and productivity.
Ekiz said that in the short-term, housing production and public and private sector investments could support growth, but in the long-term the country needs to accelerate transformation in sustainability, technology, exports and high value-added production.
Uber Technologies announced Tuesday it would acquire U.S. catering platform ezCater in an all-cash deal for $2.3 billion, marking a venture into a new area – in its latest move to strengthen delivery, the company’s fastest-growing business segment.
The deal comes months after Uber agreed in July to buy German firm Delivery Hero in a $14.8 billion transaction aimed at creating the largest food delivery group outside China.
Founded in 2007, ezCater lets companies order food from caterers for corporate events, meetings and workplace meals. It generated more than $2.5 billion in gross bookings over the past 12 months, Uber said.
The deal would combine ezCater’s catering business with Uber Eats’ restaurant network and Uber for Business’ corporate customer base, the company said.
Uber Eats has a wider global reach, but DoorDash holds the majority of the U.S. food delivery market, according to analysts, and the ezCater deal is expected to help Uber narrow that gap.
Uber said ezCater’s average order value exceeds $400 and the deal is expected to boost margins.
The acquisition adds a new line of business built on high-value group orders paid for by companies, expanding Uber’s business-focused segment, whose gross bookings grew more than 40% in the second quarter, Rosenblatt analyst Scott Devitt said.
“Importantly, bringing workplace buyers into the ecosystem supports the membership flywheel,” Devitt said.
The ride-hailing and delivery company’s shares have fallen 15% this year as investors weigh how well it can compete once robotaxis begin to reshape the ride-hailing market.
Uber’s delivery segment accounted for about 37% of total revenue in the second quarter and has been its biggest growth driver in the recent past.
The deal is subject to regulatory approval and is expected to close in the coming months.
Money leaving the investment funds now being liquidated in Türkiye has largely moved into bank deposits, the country’s central bank chief said Tuesday, adding that the risk of the turmoil spreading to the wider financial system remained limited so far.
Regulators last month ordered the liquidation of over 130 investment funds managed by seven asset managers following warnings by some that they could not meet redemption payments.
Authorities have widened their investigation into suspected market manipulation in stocks and fund markets. Eighty-five suspects have been arrested so far in the probe, Justice Minister Akın Gürlek said Tuesday.
The funds ordered to be wound down had reached more than $20 billion in assets over just three years. About half a million investors have been affected.
There have been sharp outflows from funds undergoing liquidation, and part of it came from foreign-resident investors, Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan said Tuesday.
He was answering lawmakers’ questions at Parliament’s Planning and Budget Commission.
For domestic residents, Karahan said, where the money goes matters for dollarization.
“We see that a significant portion of this amount has moved into deposits,” he said. He added that total commercial and savings deposits rose by more than TL 800 billion ($16.27 billion) over the same period.
Karahan said there had also been outflows from foreign-currency funds, and that some of that money could be expected to flow into foreign-currency deposit accounts. Even so, he said, overall deposit preferences were in line with the current Turkish lira share.
He put the lira share of investment funds at about 61% to 61.4%, and said it was holding steady.
Connection to wider system ‘weak’
Karahan said the link between the funds in liquidation and the rest of the financial system was critical for assessing contagion risk, and that current data pointed to a weak connection.
“We can say that the shift toward the Turkish lira in the financial system is continuing in some form, at least based on the data we have at the moment,” Karahan said.
He credited coordinated measures by the central bank and other institutions for keeping the risk of contagion limited so far.
He said the impact so far was mostly confined to the portfolio management companies concerned and their investors.
“We assess that the contagion risk is under control based on the data,” Karahan said. “But this does not mean everything is over. If we see the need, we will continue to take the necessary steps in every way.”
He said there had been a risk of volatility and disruption in lira markets, which was why a number of measures had been taken.
3 areas to watch
Karahan said the liquidation process was only at its start, and that a firm assessment of its macroeconomic effects would need to wait to see how it unfolds.
He said the central bank would track the impact in three areas: wealth, reserves and the real sector.
Karahan said financial wealth could decline somewhat, but that the effect on spending was expected to be smaller than that of the recent fall in gold prices.
For reserves, he said, what matters is where investors leaving the funds put their money. So far the data show a strong preference for the lira.
The third area is indirect effects through household and corporate balance sheets. Karahan said the central bank’s first analyses showed that real sector companies hold only a limited share of the liquidated funds, and that these are mostly large firms with strong liquid assets.
Any balance-sheet impact would therefore be expected to feed less strongly into the real economy. He stressed that these were initial findings and would be updated as data come in.
Cautious stance to continue
In his presentation before the commission, Karahan also said that disinflation is expected to regain momentum provided that supply pressures ease
He stressed that the bank would keep a cautious monetary policy to preserve gains achieved so far in lowering inflation.
Türkiye’s annual inflation dipped below 30% for the first time in almost five years in September, official data showed Monday.
Consumer price growth eased more than expected to 29.73% from 31.51% in August.
That marked the fourth consecutive month of decline, after the downward trend that started in mid-2024 stalled earlier this year following a sharp rise in energy prices caused by the Iran war.
Monthly price growth also came in below expectations at 1.84%, the same as in August.
Some analysts said the September reading raises the prospect of an interest rate cut at the Oct. 22 meeting.
The bank has kept its benchmark one-week repo rate at 37% this year, as it monitored the inflation impact of the Iran war.
Karahan said a slowdown in the disinflation process had been caused by war-related energy price volatility. But he added that “the main trend in inflation remains below annual inflation,” signaling that disinflation would continue if supply pressures fade.
He noted that upside risks to energy prices are being evaluated and that tight policy is seen as important in limiting the inflationary impact of supply shocks.
Karahan said a weaker-than-expected improvement in inflation expectations poses a risk to the disinflation process.
On the other hand, a slowdown in services inflation is continuing despite supply shocks, with weaker domestic demand also contributing, he noted.
Leading indicators show that a slowdown in rent inflation is expected to continue, Karahan said.
A slowdown in domestic demand has become marked, with indicators confirming a weakening of consumption activity, he noted.
Karahan also said the current account deficit-to-GDP ratio in 2026 is seen below long-term averages.
Türkiye’s combined electricity generation from solar and wind sources reached a record 9.9 billion kilowatt-hours (kWh) in August, the highest level on record, according to the Energy and Natural Resources Ministry.
Solar power generation stood at 5.16 billion kWh in August, while wind generation reached 4.74 billion kWh, the ministry said Tuesday.
Solar accounted for 14.1% of total electricity generation during the month, while wind’s share was 12.9%. Combined, the two sources generated a record 9.9 billion kWh.
Hydropower remains largest source
Türkiye generated 36.71 billion kWh of electricity in August, with hydropower maintaining its position as the largest source.
Hydropower accounted for 24.7% of total generation, producing 9.08 billion kWh during the month.
Renewable sources accounted for 56.4% of total generation, at 20.7 billion kWh, while domestic sources accounted for 69.7%, or 25.58 billion kWh.
Daily electricity generation also reached its highest level of the year so far in August. The daily record was set on Aug. 13, when generation reached 1,241,291 megawatt-hours.
Domestic generation reaches record share
During the January-August period, hydropower generation reached 75.2 billion kWh, wind generation 30.4 billion kWh and solar generation 29.8 billion kWh, marking the highest levels recorded for the corresponding period since 2000.
Domestic sources accounted for 73.2% of electricity generation during the period, producing 181.8 billion kWh. Both the volume and share were the highest for the corresponding period since 2000.
Renewable sources accounted for 60.3% of generation, at 149.8 billion kWh, also representing the highest volume and share for the corresponding period since 2000.
Energy and Natural Resources Minister Alparslan Bayraktar said Türkiye aimed to build a strong energy infrastructure through long-term investments in renewable energy.
“Our long-term investments in renewable energy infrastructure continue to translate into record generation figures,” Bayraktar said.
“Our goal is not only to meet today’s energy demand, but to build a strong, sustainable and innovative infrastructure that is completely free from external dependence,” he said.
Bayraktar added that Türkiye would continue integrating its substantial solar and wind potential into the grid using advanced technologies as it pursues its goal of achieving full energy independence.
Justice Minister Akın Gürlek said Tuesday that 85 suspects had been arrested so far in the investigation into Türkiye’s fund turmoil, and that five people had already handed back money they made through what he called “unjust gains.”
Gürlek said authorities would recover such profits from others who made them through market manipulation.
Regulators last month ordered the liquidation of over 130 investment funds managed by seven asset managers following warnings by some that they could not meet redemption payments.
Authorities have widened their investigation into suspected market manipulation in stocks and fund markets.
Legal action has been taken against 207 people in total, with measures imposed on the assets of many of them, Gürlek told Anadolu Agency (AA).
The funds ordered to be wound down had reached more than $20 billion in assets over just three years. About half a million investors have been affected.
Türkiye’s Savings Deposit Insurance Fund (TMSF) has opened accounts for investors seeking to return what authorities describe as “excessive gains” from fund sales.
Gürlek said five people had returned their unjust gains so far. Reports said among them was Fatma Betül Sayan Kaya, who resigned as a deputy chair of the ruling Justice and Development Party (AK Party) after she and her husband were alleged to have made substantial profits trading shares ahead of the turmoil.
Profits made by people who earned excessive gains over a short period would be transferred to a fund set up within the TMSF, the minister said.
“We will pursue our rights to the end within the framework of the law,” Gürlek said.
Gürlek drew a line between two kinds of earnings. Legitimate profit, he said, comes from citizens putting their savings into stocks and the stock market. The other kind came from so-called “bubble” stocks, where traders made abnormal profits by moving in and out quickly.
He said investigators had found that some people in closed and open funds had acted on tips and inside information, and used manipulative trades to make “extraordinary” profits over a short time.
He said the Istanbul Chief Prosecutor’s Office, working with data from the Capital Markets Board (SPK), Borsa Istanbul Stock Exchange and the Central Registry Agency, had frozen the assets of people who made abnormal gains.
Some of them had been arrested, he said, and others had fled. He said the process was continuing.
Gürlek said his ministry first noticed unusual movement in some funds and shares in February 2025 and wrote to the SPK about it. Citizens’ complaints then increased sharply in August 2026. Permission to investigate was granted later that month, he said.
Gürlek said the State Supervisory Council (DDK) had been tasked with examining whether any public institutions were negligent.
He said the Turkish market and economy were very strong and that a problem in a small part of the market should not be generalized.
The U.S. trade deficit surged more than analysts expected in August, government data showed Tuesday, hovering at its widest level since March 2025, driven by imports of oil and advanced tech products like chips.
The trade gap in the world’s biggest economy jumped 13.7% to $105.6 billion, according to Commerce Department data.
This was larger than the $102 billion projected in a consensus forecast released by MarketWatch.
U.S. trade flows have swung significantly since President Donald Trump returned to the White House in January 2025, as businesses rushed to get ahead of his sweeping, and fast-changing tariffs on trading partners.
The latest figures, which are adjusted for seasonality but not inflation, also reflect a surge in global energy prices from the war in the Middle East.
U.S.-Israel strikes targeting Iran in late February had triggered Tehran’s response in blocking the Strait of Hormuz, a key waterway for energy transport, which sent oil prices soaring.
Both sides remain locked in conflict.
In August, U.S. imports rose by 4.3% to $420.8 billion, driven by crude oil, gold, semiconductors and industrial machinery.
U.S. exports climbed by 1.4% to $315.2 billion, partially driven by energy exports too.
German factory orders dropped sharply in August, more than forecasted, as large-scale orders for aircraft, ships, trains and military vehicles declined, official data showed Tuesday, underscoring the fragility of a recovery in Europe’s biggest economy.
New orders, a key indicator of future business activity, were down 10.6% from a month earlier due to a drop in large-scale domestic orders, according to provisional data from Destatis.
It was the first decline in four months and more than the 1% decrease forecast by analysts surveyed by the financial data firm FactSet and Reuters.
The long-stagnant German economy has been slowly recovering on the back of massive public spending, with some recent data generally pointing to signs of growing strength.
The economy ministry said August’s order data thus represented a “marked setback.”
The decline was entirely attributable to a 61.5% slump in what the statistics office classifies as “other transport equipment,” a category that more than doubled in July due to an exceptionally high volume of large-scale orders of ships, railway rolling stock and aircraft.
When large-scale orders are excluded, new orders in August were 0.1% lower than in the previous month.
Weak figures likely to drag on Q3 growth
The weak figures suggest industry will weigh on third-quarter economic growth after helping to drive expansion in the first half of 2026, although analysts expect a rebound in the fourth quarter as government contracts pick up.
The German economy grew by 0.3% in the second quarter, prompting the government to raise its full-year forecast to 1.3%.
Much of the momentum seen in German industry so far this year has been driven by defense spending.
“Excluding these highly volatile large orders, bookings in the manufacturing sector have been treading water for months,” said Jupp Zenze, economic expert at the German Chamber of Commerce and Industry.
“Broad-based economic momentum remains absent.”
Economist points to full order books
The three-month comparison, which strips out some of the month-on-month volatility, showed that new orders in the period from June to August were 1.3% higher than in the previous three months.
Based on the figures available so far, the industrial sector likely slowed growth of the German economy in the third quarter, in contrast to the first half of the year, said Commerzbank senior economist Ralph Solveen.
However, Solveen expects this trend to reverse in the fourth quarter, as the government is likely to issue more contracts, which should have a positive long-term impact on sales and production.
“This outlook is also supported by the significant improvement in business sentiment over the past few months,” he said.
After revision of provisional data, new orders in July increased by 3.2% compared with the previous month, up from the previously estimated 2.5%.
According to the latest data from July, the order backlog provided coverage for a record nine months, said Marc Schattenberg, economist at Deutsche Bank.
“The disappointingly weak August figures should be viewed in the context of already very full order books,” Schattenberg said.
Foreign orders were down 5.4% in August on the month, with orders from the euro zone registering a decline of 5.4% and orders from outside the eurozone decreasing by 5.5%. Domestic orders declined by 17.3% on the month.
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