Economy
Trump says he ‘loves’ inflation as prices hit 3-year high
U.S. President Donald Trump brushed aside concerns over rising consumer prices on Wednesday, saying he “loved” the latest inflation figures and expressing confidence that inflation would ease once the conflict involving Iran comes to an end.
Asked about U.S. government data showing consumer inflation increased at its fastest pace in three years in May, and whether it could hobble his fellow Republicans just months ahead of November’s midterm election, Trump said: “I love the inflation.”
The president then explained how he greenlit a plan to secretly move oil tankers through the Strait of Hormuz over concerns of higher costs and increasing inflation. “It was worth it to me,” Trump said about his calculus and calling the operation a success. “When it’s over, you will see oil drop to where it was before,” Trump said of the larger war. “It’s coming down. It’s going to come down like a rock.”
Trump has called the war on Iran a detour and framed it as a national security issue as Tehran’s closure of the key shipping route has pushed up the cost of gasoline, fertilizer and other goods, contributing to inflation.
Higher prices could also keep the U.S. Federal Reserve from cutting interest rates, which could lower borrowing costs, which Trump has called for since returning to power last year. Republicans are seeking to maintain control of the U.S. House of Representatives and the Senate but are concerned a consumer backlash could hand the reins to Democrats as the cost of living remains a top issue for voters.
Trump himself won the 2024 presidential election in large part because of his promise to lower inflation, but has since seen his approval rating, including on his handling of the cost of living, fall to the lowest level of his political career.
Efforts to reopen the Strait of Hormuz to tanker traffic to move goods have so far stalled, with industry executives and analysts warning that coming weeks could see another oil price shock severe enough to shake the broader financial markets.
Even if Trump and Tehran reach a deal soon, it is expected to take months to get supplies moving, with the disruptions expected through 2026. And while Americans may be more insulated from fuel shocks than other nations, ongoing higher energy prices could dent consumer spending over time.
Last month, Trump said Americans’ financial struggles were not a factor as he pushed for a deal even while threatening renewed attacks on Iran: “I don’t think about Americans’ financial situation. I don’t think about anybody. I think about one thing: We cannot let Iran have a nuclear weapon.”
Turkish Airlines (THY) on Wednesday reported the highest occupancy rate ever recorded for the month of May, as its passenger count rose despite challenges amid the Middle East conflict.
National flag carrier served 7.9 million passengers last month, a 3.7% increase from a year ago, it said in a statement.
It achieved an 84% load factor, the highest ever May rate that marked a 2.9% year-over-year rise.
The airline increased its capacity, measured in available seat kilometers (ASK), by 2.5% compared with the same month a year earlier.
International load factor stood at 84%, while domestic flights recorded a load factor of 84.4%.
Total available seat kilometers rose to 23.2 billion in May from 22.6 billion a year earlier. Cargo and mail volumes increased 8.6% year-over-year to 203,100 tons.
From January through May, THY carried 36.4 million passengers, up 7.3% from the same period last year.
Overall passenger load factor for the five-month period reached 83.6%, with international routes posting 83.5% and domestic routes 84.3%.
Capacity during the five-month period increased 6.5% year-over-year to 112.1 billion available seat kilometers from 105.3 billion.
Cargo and mail traffic rose 13.5% to 954,600 tons during the period.
Its fleet included 542 planes as of the end of May, a figure is aimed to be expanded to 800 aircraft under the company’s 2033 strategy.
THY’s Chair of Board Murat Şeker said on Monday the airline plans to add ultra-long-range aircraft from late 2027 that would enable nonstop services to destinations in Australia and South America.
The carrier has orders in place for nearly 420 aircraft, including Airbus and Boeing jets, with negotiations continuing for an additional 100 Boeing planes.
Global airlines are grappling with higher fuel costs driven by the U.S. and Israel’s war with Iran, which has choked jet fuel supplies and disrupted key air corridors, forcing costly detours.
But Şeker said THY has not faced fuel supply challenges and has been less affected than some Asian markets.
The Iran conflict has upended traffic flows through Middle Eastern hubs such as Dubai, Doha and Abu Dhabi, creating acute challenges for Gulf carriers including Emirates, Qatar Airways and Etihad.
Disruptions provided THY with an opportunity to attract new passengers from South Asia, the Far East, the Maldives, Seychelles and North America.
But, Şeker said “only time will tell whether this turns into a real and lasting opportunity in the long term,” noting that major Gulf carriers have largely restored their pre-crisis capacity levels.
THY had budgeted for capacity growth of 7%-8% this year but Şeker said it now expects expansion of only 1%-2%.
Türkiye has secured 200 million euros (more than $230 million) in financing from the European Investment Bank (EIB), marking the lender’s first major funding package for the country after an eight-year break, the Treasury and Finance Ministry said on Tuesday.
The funding will be provided under two separate deals backed by a Treasury repayment guarantee. Half of the amount, 100 million euros, will go to the Türkiye Development and Investment Bank (TKYB) to support sustainable industrial investments, while the remaining 100 million euros will be channeled through Türk Eximbank for green financing projects aimed at exporters.
The funds are intended to back investments in renewable energy, energy efficiency and sustainable industrial production, in line with Türkiye’s climate targets and broader green growth strategy.
With the latest agreements, the total amount of external financing secured by Türkiye this year has reached $4.9 billion.
Treasury and Finance Minister Mehmet Şimşek said the EIB’s support for Türkiye’s development priorities was expanding through close cooperation between the two sides.
“The positive momentum in Türkiye’s relations with the European Union is beginning to produce tangible results in external financing,” Şimşek said.
He noted that, excluding a loan provided for post-2023 earthquake reconstruction efforts, the EIB had resumed offering financing opportunities to Türkiye after an eight-year pause.
The EIB had stopped virtually all lending in Türkiye after a row over oil and gas drilling off the island of Cyprus in 2019.
It formally returned to the country this year.
TKYB CEO Ibrahim Öztop said the last financing agreement with the EIB had been signed in 2017, describing the latest deal as a sign of confidence in Türkiye’s economy, transformation agenda and long-term growth potential.
“The 100 million euros financing package will support investments in renewable energy, energy efficiency and green industry, helping Turkish companies improve productivity, strengthen competitiveness and adapt to a changing global economy,” Öztop said.
Türk Eximbank CEO Ali Güney said the funding would support exporters’ projects aimed at expanding renewable energy use, improving energy efficiency and reducing carbon emissions.
He added that the financing would help Turkish exporters adapt to the European Union’s Carbon Border Adjustment Mechanism (CBAM), a key requirement for maintaining access to European markets.
‘New chapter’
EIB Vice President Robert de Groot said the two credit facilities would provide financing to small and medium-sized enterprises (SMEs) across Türkiye, supporting energy-efficiency and renewable-energy projects while helping strengthen supply chains, reduce emissions and create green jobs.
De Groot described the agreements as the beginning of “a new chapter” in cooperation between the EIB and Türkiye’s banking sector.
During meetings with government officials in Ankara, De Groot said they discussed expanding cooperation in areas including sustainable transport, clean energy and water infrastructure.
He noted that Türkiye was well positioned to advance its green and resilient growth ambitions, and said the EIB stands ready to support that journey.
Flag carrier Turkish Airlines (THY) was once again recognized as the country’s most valuable brand, according to a report by international brand valuation organization Brand Finance on Wednesday.
According to the “Türkiye 125” survey, Turkish Airlines reclaimed first place in 2026, as in previous years, with a brand value of $2.884 billion (TL 133.06 billion).
Household appliances maker Arçelik claimed the second spot with $1.989 billion, while private lender Iş Bank maintained its third place with $1.243 billion.
Ford Otosan, which was fifth last year, rose one spot to fourth place with a brand value of $1.037 billion. State lender Ziraat Bank also climbed to fifth place with a brand value estimated at some $958 million.
This year, 13 new brands were included in the list. Alfa Solar, ATP, Baykar, Besler, Çelebi Aviation, Datagate, e-Bebek, Karaca, Karel, Koçtaş, Ray Sigorta, Trabzonspor, and Yudum entered the ranking.
Brand Finance Türkiye Director Muhterem Ilgüner, in an assessment shared with Anadolu Agency (AA), noted that they are celebrating their 20th anniversary this year and suggested that the total value of the 125 brands increased by 15% compared to last year, rising from $17 billion to $19.6 billion.
Ilgüner pointed out that for the second consecutive year, there has been an increase in total value.
“Aviation and defense, financial services, and electronics and ready-to-wear brands with activities abroad have positively influenced the total brand value,” he said.
“Banking services constitute 23% of the total brand value, while airline and electronics brands make up 15%,” he added.
Moreover, he pointed out that renewable energy brands have begun to find a place on the list.
“An important observation over the years is that revenue generated abroad and in relatively stable country markets has a positive impact on brand value calculation. Therefore, the spread, acceptance, and strengthening of Turkish brands abroad will have a positive effect on their brand values,” he further said.
Emphasizing that the Turquality Project is an exemplary initiative launched for this purpose, Ilgüner explained that today, this support program has nearly 500 member brands, and its outcomes should be evaluated not just in terms of export success but as brand success.
Murat Şeker, the chairperson of the board of Turkish Airlines, stated that THY’s top position once again in the report prepared by Brand Finance is a significant indicator of stable growth and a strong brand strategy.
By increasing its brand value by 27% compared to the previous year, reaching $2.9 billion, the carrier has preserved its status as the country’s most valuable brand for the ninth consecutive time. Additionally, it also continued to rise in the global airline brand rankings, reaching 15th place among the world’s most valuable airlines, marking its best achievement to date.
“To be recognized as Türkiye’s most valuable brand without interruption for nine years and to increase our brand value by 27% to $2.9 billion is a significant indicator of the stable growth and strong brand strategy we have demonstrated. As Turkish Airlines, we will continue to add value to our country and proudly carry our flag in the sky by focusing on service quality and sustainable growth,” Şeker said.
Chinese automaker BYD has put a factory it planned to build in Türkiye on hold while it focuses on production in Europe, a top executive said on Tuesday.
BYD said in 2024 it would invest $1 billion to build a plant in Türkiye that would start production this year.
China’s No. 1 automaker currently does not have a timeline for starting production in Türkiye, Executive Vice President Stella Li told Reuters at the company’s U.K. headquarters in west London.
The factory in Manisa, western Türkiye, was planned to have an initial annual capacity of 150,000 cars.
Türkiye has long served as a low-cost manufacturing hub for major automakers, including Toyota, Stellantis, Ford, Hyundai and Renault.
Last year, the Turkish government said BYD rival Chery would invest $1 billion in a plant with an annual production capacity of 200,000 vehicles.
BYD’s Li, meanwhile, said the company would start assembling cars at its new plant in Hungary in the fourth quarter of this year.
“Hungary is the number one priority right now,” she noted. “The second priority will be to focus on finding a second (production) facility in Europe.”
The start of production comes about a year later than originally expected. Li said last September the plant in Szeged in southern Hungary – BYD’s first factory in Europe – would start producing the Dolphin Surf compact electric car by the end of 2025.
Used to speed at home in China when it comes to building new factories, BYD and Chery have experienced delays in Europe.
Chery has pushed back the start of production at a plant in Barcelona a number of times, but says the joint venture with Spanish carmaker Ebro will start making vehicles in 2026.
Li said BYD was still installing equipment at the factory.
BYD’s sales in Europe grew 270% last year to almost 188,000 vehicles. European sales at the world’s largest electric vehicle maker rose 144% year to date through May this year to over 100,000 units.
Building EVs in Europe would help BYD avoid European Union tariffs on Chinese-made electric cars.
Many of the cars made in Türkiye are also destined for Europe and face no tariffs when exported to the EU.
Türkiye is prepared for the opening of a key customs gate with Syria, a top trade official said on Tuesday at an event in the southeastern city of Gaziantep, which gathered officials from both countries to discuss commercial opportunities and advancing trade and integration.
Turkish officials highlighted growing economic ties with Syria during the “City Economies Summit Gaziantep-Aleppo,” announcing plans to open new customs gates and targeting a $10 billion (TL 460 billion) trade volume in the coming years.
The summit, organized by Anadolu Agency (AA) in cooperation with the Gaziantep Metropolitan Municipality, gathered Turkish and Syrian officials and businesspeople.
The summit focused on a large-scale intermediate production ecosystem planned for the border region and related investment opportunities.
Following the opening ceremony, Anadolu Economy and Finance News Department Director Serhat Akkan moderated a session titled “New Horizons in Trade for Türkiye and Syria.”
Trade Minister Ömer Bolat and Syrian Minister of Economy and Industry Mohammad Nidal al-Shaar participated as speakers in the session.
The ministers evaluated opportunities for cooperation between the economies of the two countries.
Bolat stated that the two nations aim to reach a $5 billion annual trade volume within two years and $10 billion by the early 2030s.
“We are fully prepared for the opening of the Islahiye Customs Gate, and by working together, we will be able to announce its opening as soon as possible,” he said.
Officials also informed their Syrian counterparts about their readiness to open the customs gate between Nusaybin and Qamishli.
Bolat emphasized that Türkiye gave top priority to protecting Syria’s territorial integrity and national unity following the fall of the Assad regime in December 2024.
He also informed that Turkish banks reached an agreement to open branches in Syria as central banks continue their negotiations.
Türkiye strongly supported the Syrian government to help lift embargoes imposed by the U.S. and the European Union.
Al-Shaar, for his part, underscored the importance of cooperation with Türkiye, calling the country its “natural partner.”
“Türkiye is our natural partner. We view the relation in this regard,” he said.
Noting that Damascus is drafting new regulations to support economic growth and reassessing laws related to trade, investment, banking and industry, al-Shaar urged Ankara and Damascus to become a common source of production.
“We are making efforts to establish sustainable, compatible and strong economic relations in Syria,” he said.
Despite the lifting of international sanctions imposed for years, Saar said their effects are still being felt.
He added that modernizing the banking sector remains one of the country’s top priorities.
Rebuilding process
Moreover, he stressed that rebuilding the country after 64 years of oppressive rule and years of war cannot be achieved quickly.
“Some may think we are moving slowly, but we are managing the process carefully and rationally to achieve lasting and sound results,” he said.
Al-Shaar also said Syria’s strong ties with Türkiye provide confidence amid regional fluctuations. He noted that Syrian traders and industrialists have learned to operate under crisis conditions and that the country’s economy has gained resilience against external shocks.
He praised Türkiye’s constructive role in supporting regional stability and said Syria is pleased with Ankara’s approach, expressing confidence that cooperation between the two countries will grow stronger.
Calling on Turkish investors to take a more active role in Syria, the minister said his country is now ready to absorb and support new investments.
“Syria is ready. Our country is your country too. Please come,” he said.
Long-term partnerships
Turkish Ambassador to Damascus Nuh Yılmaz described Türkiye as Syria’s gateway to global markets and Europe.
Yılmaz attended a special session as a guest, which addressed revitalized trade, logistics and production ties, alongside messages regarding regional economic integration.
He characterized Syria as a strategic logistics corridor connecting Türkiye to the Middle East and the Gulf region.
The ambassador advised investors to establish long-term partnerships rather than focusing solely on short-term trade.
He recommended the Aleppo-Idlib region as a primary investment area due to its stable energy supply and skilled workforce.
Yılmaz pointed out that security conditions in Syria improved significantly after the central government regained control of various territories.
Turkish officials also started working with the immigration authority to facilitate visa processes for Syrians making a definitive return to their home country.
Gaziantep Mayor Fatma Şahin highlighted the massive opportunities existing between Aleppo and Gaziantep.
She also called for the revitalization of historical logistics networks to boost regional trade.
Gaziantep Governor Kemal Çeber stressed the necessity of standing shoulder to shoulder to build a shared future based on historical ties.
He predicted that the border area would soon become the new economic hub of Türkiye.
The event also sought to highlight regional production, logistics and investment opportunities while creating lasting cooperation platforms between the public sector, private sector and academia.
The summit, which comprehensively addressed the revitalized trade, logistics and production ties between Türkiye and Syria, aimed to contribute to regional economic integration.
Türkiye is working on new measures to reduce financing costs for businesses, and authorities are considering mechanisms to partially offset borrowing costs through the budget, Treasury and Finance Minister Mehmet Şimşek said Monday.
Şimşek said the government could not fully absorb all financing costs but was examining models that would cover part of the cost above inflation without undermining the country’s disinflation strategy.
“Of course, it is not possible for us to fully cover all borrowing costs. However, we are working on models that would compensate part of the cost above inflation through the budget, to a certain extent and without disrupting the (medium-term) program’s balance,” he told the private broadcaster CNN Türk.
Şimşek said the government was making intensive efforts to ease financing constraints facing the real sector, highlighting export rediscount loans currently offered at interest rates of around 23.9%, well below the annual inflation rate.
“We will continue these supports and even increase them. We will not stop here. When conditions allow, we will lower financing costs further,” he said.
The minister reiterated that inflation remains on a downward trajectory despite a challenging global environment, while warning that the Iran war has generated economic effects extending well beyond higher energy prices.
Last week’s data showed Türkiye’s inflation in May increased 32.6% from a year ago, slightly higher than expected and up from 32.4% in April.
That underscored fallout from the U.S.-Iran war, which has effectively shut the key Strait of Hormuz, sending global energy prices sharply higher.
According to Şimşek, the conflict has created supply shocks across a range of strategic commodities, including oil, natural gas, chemicals, fertilizers, helium and raw materials used in semiconductor production.
He said rising energy prices were creating cost pressures across sectors ranging from textiles and footwear to agriculture, adding that lower fertilizer use could reduce agricultural productivity and place additional upward pressure on food prices.
Tighter global financial conditions, weaker demand
Şimşek also warned that tighter global financial conditions and weaker demand in some export markets could weigh on economic activity.
The minister said current oil price levels, when combined with secondary effects, were generating at least 5 percentage points of additional inflationary pressure.
“If inflation was expected to be 21%, it could be 26%,” he said.
The Central Bank of the Republic of Türkiye (CBRT) raised its year-end interim inflation target to 24% from 16% last month.
Şimşek stressed he does not attribute deviations from inflation targets solely to external shocks and acknowledged the role of domestic structural factors.
He said the government’s economic program remains focused on restoring macroeconomic stability through disinflation, fiscal discipline and a sustainable current account balance.
Türkiye’s foreign exchange reserves have risen to a level sufficient to cover roughly five months of imports, he noted, emphasizing the importance of reserve accumulation in a region exposed to geopolitical risks.
Şimşek added that Türkiye would be among the countries benefiting most if energy markets normalize following an eventual end to the conflict.
Türkiye has spent approximately $1.1 trillion on oil and natural gas imports over the past 23 years, which the minister said meant lower energy prices would rapidly feed into lower inflation.
Housing, food, transport key to cost-of-living fight
Şimşek said the fight against the cost of living remains centered on housing, food and transportation, which account for around 67% of average household spending and as much as 77% for lower-income households.
To curb housing inflation, he pointed to efforts to expand housing supply, including the delivery of 500,000 homes in 2023 earthquake-hit regions and plans to hand over another 120,000 units this year.
While rent inflation in the quake zone has fallen to around 20%, nationwide rent inflation remains just below 50%, he said.
With new social housing projects and public-supported investments, Şimşek said he expects annual rent inflation to decline to between 30% and 35% by the end of the year.
He also highlighted ongoing efforts to increase agricultural production through organized farming zones and greenhouse investments, while reducing food losses throughout the supply chain.
The minister said the effects of these structural measures would become more visible within the next two to three years.
Şimşek also referred to recently unveiled new incentives to attract investment, capital and skilled workers.
He cited corporate tax incentives for production-oriented investments, transit trade, service exports and qualified service centers as part of efforts to position Türkiye as a regional hub.
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