Economy
Türkiye, Russia pledge deeper economic ties at joint gathering
Trade Minister Ömer Bolat said Friday that Türkiye and Russia are continuing to strengthen their economic relations, emphasizing that the resilience and complementary nature of both countries’ economies offer ample opportunities for deeper cooperation.
Speaking at the 19th session of the Turkish-Russian Intergovernmental Joint Economic Commission (JEC) in Moscow, Bolat highlighted the strategic importance of both nations as regional neighbors and key players.
“The commercial and economic partnership developed over the years between Türkiye and Russia has laid the foundation for peace and stability in the region,” Bolat said.
He noted that President Recep Tayyip Erdoğan and Russian President Vladimir Putin are committed to advancing bilateral relations and working together to meet the mutual goal of increasing trade volume to $100 billion (TL 3.99 trillion).
Despite global and regional challenges, Bolat said the two countries have made significant progress in their relations. “Our joint work with Russia and our major, visionary projects are expanding. We aim to carry our future projections into the second quarter of the 21st century in line with national and international obligations, to contribute to the development of our regions, countries and peoples,” he said.
Bolat added that a memorandum of understanding to be signed at the conclusion of the JEC meeting, along with its accompanying agreements, would further boost economic and trade ties between the two nations.
Recalling the shocks Türkiye has faced in recent years, including the COVID-19 pandemic and a devastating earthquake that struck 11 provinces, Bolat thanked Russia for its aid during the disaster. “Despite the difficulties, under President Erdoğan’s leadership, our country has shown resilience and has largely overcome these challenging times,” he said.
Bolat pointed to Türkiye’s uninterrupted growth over the past 19 quarters, noting that the economy grew by 3.2% last year, reaching a size of $1.3 trillion. He said exports, which stood at $36 billion in 2002, surged to $262 billion in 2024 – nearly a sevenfold increase.
“The undeniable potential of the Turkish economy is resonating globally,” Bolat said. “The World Bank recently revised Türkiye’s 2024 growth forecast upward from 2.6% to 3.1%.”
Bolat also praised Russia’s economic performance, saying it exceeded global expectations. According to International Monetary Fund (IMF) data, the Russian economy grew by 4.1% in both 2023 and 2024.
Thanks to JEC meetings, Bolat said Türkiye and Russia have been able to develop a multi-layered and wide-ranging economic relationship. “Our regularly held high-level Joint Economic Commission meetings are a clear result of this dynamic interaction,” he added.
Inflation in the U.K. jumped to 3.3% in March from 3.0% in February, official data showed on Wednesday, driven mainly by a notable rise in energy prices following the start of U.S. and Israel’s war with Iran.
Factory gate prices also jumped and by much more than expected, the figures from the Office for National Statistics (ONS) revealed.
Economists said the increases – driven largely by fuel – were unlikely to push the Bank of England’s (BoE) Monetary Policy Committee (MPC) to raise interest rates as soon as next week’s meeting, and the key question was whether the jump in energy prices would ignite a broader inflation problem.
“Inflation will probably fall to 2.9% in April as the big hikes in regulated prices drop out of the annual comparison,” said Ruth Gregory, deputy chief U.K. economist at Capital Economics.
“But the next eight months will be an uncomfortable ride for the MPC.”
Economists polled by Reuters had mostly expected the headline consumer price inflation rate to accelerate to 3.3%, driven by a rise in petrol and other fuel costs in March.
The price of motor fuels jumped by 8.7% on the month, the biggest rise since June 2022, shortly after Russia’s full-scale invasion of Ukraine, the ONS said.
The data showed services price inflation – which the BoE watches closely as a sign of longer-term inflation pressures – rose unexpectedly to 4.5% from 4.3% in February.
But much of that increase was due to a rise in air fares driven by the timing of the Easter holidays.
Core inflation, which excludes more volatile food, energy, alcohol and tobacco prices and is also watched closely by the BoE, weakened to 3.1% from 3.2% in February.
War impact
Before the U.S.-Israeli war on Iran began on Feb. 28, the BoE said Britain’s inflation rate – the highest among the G-7 economies for much of the last four years – was likely to be close to its 2% target in April.
But last month, the BoE sharply increased its inflation forecast due to the energy price shock, predicting it would rise toward 3.5% by the middle of 2026.
The International Monetary Fund (IMF) last week predicted British inflation would peak at 4% in the coming months.
However, the BoE’s interest rate-setters have mostly said it is too soon to know what the rise in headline inflation will mean for underlying price pressures in the economy, given the weak jobs market, which could make it harder for workers to demand higher pay or for businesses to pass on higher costs.
The British central bank is expected to keep borrowing costs on hold on April 30 at the end of its next scheduled Monetary Policy Committee meeting.
Financial markets on Wednesday were betting on one or possibly two quarter-point interest rate rises by the BoE this year. But a Reuters poll of economists showed most expected no change in borrowing costs during 2026.
The ONS figures showed cost inflation reported by manufacturers, some of which will filter through into consumer prices, soared last month.
Producer input price inflation leapt in March alone by 4.4%, the second biggest monthly increase since records began in 1984, behind only the increase in March 2022 due to the energy price shock spurred by the invasion of Ukraine.
Producer prices charged by services firms rose by 3.0% in the first quarter, up from 2.8% in the fourth quarter, the highest reading since the third quarter of 2024.
Spain’s government on Tuesday approved a broad plan to tackle the country’s deepening housing crisis, a key political challenge for Prime Minister Pedro Sanchez ahead of elections next year.
Rising rental and housing costs are pricing many Spaniards out of the market, despite a recent economic boom. Incomes have failed to keep up. Analysts say tourism and population growth in cities driven by immigration have further strained supply.
The new plan, worth 7 billion euros ($8.23 billion), triples government investment in public housing over the next four years. It ensures that subsidized housing cannot be reclassified after a few years. It also includes help for young renters and home buyers.
“It is a significant step forward. For the first time in decades, there is a serious budgetary commitment,” said Raluca Budian, associate director of the Observatory for Decent Housing at the Madrid-based Esade business school.
About 40% of the money will be earmarked for growing the public housing supply, which Spain lacks compared to the European average, while 30% will be set aside for property renovations, the government said. That will include funds for making homes more energy-efficient and building in depopulated parts of the country.
The rest will go toward subsidies, with a focus on young people.
“The public is demanding an agreement to address the main problem currently affecting them,” Housing Minister Isabel Rodríguez said Tuesday. Housing routinely comes up as Spaniards’ top concern, according to state pollster CIS.
Housing costs in Spain rose nearly 13% year-on-year at the end of 2025, according EU statistics agency Eurostat.
Spain ranks near the bottom of Organization for Economic Co-operation and Development countries with public housing for rent, with under 2% of available supply. The OECD average is 7%. In France, it is is 14%, Britain 16% and the Netherlands 34%.
In the past, Spain built housing with public funds that later passed into private ownership. Once they were sold, they disappeared from the public housing stock.
Brazil does not favor either the United States or China as a trading partner, President Luiz Inacio Lula da Silva said Tuesday, underscoring the country’s balanced approach to global economic ties.
Lula said Brazil seeks to maintain strong and pragmatic relations with both Washington and Beijing, prioritizing national interests over geopolitical alignment.
“We want multilateralism,” Lula added during a joint declaration alongside Portuguese Prime Minister Luis Montenegro at Lisbon’s Belem Palace.
Last month, the Brazilian leader described China as his country’s “best partner,” as he welcomed investments by Chinese carmakers in Latin America’s largest economy.
“I am confident that the partnership with China is thriving,” Lula told an event marking the reopening of an automotive plant in Goias state, a partnership between Brazil’s CAOA and Chinese automaker Changan.
Italy’s foreign minister said Tuesday that a proposal to suspend the EU-Israel Association Agreement has been set aside, with member states expected to consider alternative measures in the coming weeks.
Speaking to reporters on the sidelines of the EU Foreign Affairs Council meeting in Luxembourg, Antonio Tajani said the proposal to suspend the trade agreement with Israel over Gaza has been definitively shelved.
“Other possible initiatives will be discussed at the next ministerial meeting on May 11, and we will evaluate them,” he was quoted by the Italian news agency ANSA.
Recalling that his country has recently suspended the automatic confirmation of the defense memorandum with Israel, he noted that Italy is applying pressure.
However, he added: “It must be the government, not the civilian population.”
“We have a different position from Spain, because theirs doesn’t seem like the right path to take. Our position is identical to Germany’s,” said the foreign minister.
It came as European countries were divided over trade ties with Israel, as Spain and Ireland pushed for the suspension, while some other countries, including Germany, had expressed opposition to the idea.
Israeli offensive in Gaza, retaliating to a Hamas attack on southern Israel, has killed more than 72,500 Palestinians, wounded over 172,000 others, while destroying about 90% of Gaza’s civilian infrastructure since Oct. 7, 2023.
Israel has repeatedly violated a cease-fire in place since Oct. 10, 2025, killing 777 Palestinians and injuring 2,193 others.
Türkiye expects to benefit from new regional dynamics after ongoing conflicts subside, Vice President Cevdet Yılmaz said on Tuesday, stressing that the country’s diversified supply structure and relative stability position it as a “safe haven” for investment.
“As a country with diversified supply systems, we do not have a supply shortage in any area. A new regional environment awaits us after the war. New dynamics will come into play, and we believe that as a country that maintains its stability and preserves its character as a safe haven, we have very significant opportunities and possibilities in this environment,” Yılmaz said.
He was speaking at a roundtable organized by the Union of Chambers and Commodity Exchanges of Türkiye (TOBB) and the U.S. Chamber of Commerce.
“Although these events may have negative impacts in the short term, they bring an important perspective and significant opportunities for Türkiye in the medium term,” said the vice president.
Oil and gas prices spiked following the start of joint U.S.-Israeli strikes on Iran on Feb. 28. Global supply chains are facing a historic upheaval as the war disrupts shipments through the Strait of Hormuz, the key transit point for Gulf oil and gas exports, as well as fertilizers.
Yılmaz said Türkiye has managed to shield itself from supply disruptions thanks to diversified sourcing, while taking measures to limit inflationary pressures caused by rising global prices.
“We are making efforts to contain the impact on inflation, even at the cost of taking on some fiscal burden,” he said.
At the same time, Yılmaz underscored Ankara’s dual approach of maintaining strong deterrence while advocating diplomacy, negotiations and cease-fires in regional conflicts.
“We support peace and diplomacy in every field and will continue to contribute to these processes,” he said.
Trade momentum continues, but imbalance widens
The meeting in Ankara, attended by senior representatives from the U.S. business community, focused on expanding bilateral trade and investment ties.
Yılmaz highlighted the strong trajectory of economic relations between Türkiye and the United States, noting that bilateral trade reached $39 billion in 2025, with the U.S. becoming one of Türkiye’s largest export markets.
Trade volume stood at $10.4 billion in the first quarter of 2026, signaling continued momentum toward the long-standing $100 billion trade target, he said. However, Yılmaz acknowledged that the trade balance has recently shifted against Türkiye, partly due to increased imports in energy and defense.
“To ensure a more sustainable and balanced structure, we aim to diversify trade and focus on high value-added sectors,” he added.
Beyond trade, mutual investments have also deepened. Direct U.S. investments in Türkiye totaled $16 billion between 2003 and 2025, with more than 2,300 U.S.-capital companies operating in the country across production, exports, employment and research and development.
Turkish companies, in turn, have invested more than $14 billion in the United States over the same period. Still, Yılmaz said Türkiye has significant untapped potential given the United States’ roughly $8 trillion global foreign direct investment stock.
Business leaders see strong investment potential
TOBB President Rifat Hisarcıklıoğlu echoed the positive outlook, saying the recent surge in trade and investment ties has created strong momentum toward the $100 billion target, though sustainability and balance remain key priorities.
He also pointed to shifting global supply chains, where trends such as near-shoring and friend-shoring are elevating Türkiye’s strategic importance due to its geography, industrial capacity and workforce.
Chobani founder Hamdi Ulukaya, who also heads the U.S.-Türkiye Business Council, said the current geopolitical environment has further underscored Türkiye’s role as a strategic investment destination.
“Türkiye has a young, dynamic business environment,” he said, adding that long-term investors could reap significant returns. “Investments in Türkiye will yield incredible results.”
Turkish home appliance maker Arçelik said Tuesday it has agreed to sell its 60% stake in a joint venture with the Japanese Hitachi Global Life Solutions under a share purchase agreement worth approximately $261 million, thus exiting the venture.
Accordingly, the Turkish company will transfer its stake in the venture called Arçelik Hitachi Home Appliances to Hitachi Global Life Solutions, the company said in a statement shared at the Public Disclosure Platform (KAP).
Under the deal, Arçelik will receive $205 million in cash at closing, with deferred payments totalling $56 million to be paid in instalments over three years, it said.
The final price will be adjusted at closing to include 60% of Arçelik Hitachi’s net cash exceeding $56 million, the company said in a statement.
Türkiye is a major white goods producer, but sales, exports and production in the sector in Türkiye shrank last year as rising costs weighed on competitiveness.
The transaction marks Arçelik’s exit from the joint venture formed with Japan’s Hitachi in 2020 and includes the transfer of 12 subsidiaries, among them manufacturing plants and R&D centers in China and Thailand.
At 7:04 a.m. GMT, Arçelik shares were around 3% higher, though still about 37% below their May 2024 peak.
Hitachi said the deal is part of a broader restructuring. It plans to fold its home appliances operations, including its remaining 40% stake in Arçelik Hitachi, into a new company to be set up under a strategic partnership with Japanese electronics retailer Nojima Corporation.
If that restructuring is completed, Arçelik’s 60% stake will ultimately be acquired by the new company under Nojima’s indirect control. If not, Hitachi will directly purchase Arçelik’s stake.
Completion is subject to regulatory approvals and the completion of Hitachi’s planned spin-off. The parties expect the closing within 12 months.
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