Economy
Türkiye’s annual inflation cools to 31.75% in July
Annual consumer price inflation in Türkiye cooled to 31.75% in July, according to official data released Monday.
The rate slowed from 32.11% in June, the Turkish Statistical Institute (TurkStat) said.
On a monthly basis, consumer prices increased 1.78%, accelerating from a 0.99% rise in June.
Both figures came slightly below market expectations.
An Anadolu Agency (AA) survey had forecast an annual inflation of 31.8% and a monthly increase of 1.82%.
The consumer price index rose 19.86% compared with December 2025, while the 12-month moving average increase stood at 31.90%.
Among the three expenditure groups with the largest weights, annual prices increased 40.32% for housing, water, electricity, gas and other fuels, 37.53% for food and non-alcoholic beverages, and 30.83% for transportation.
Food and non-alcoholic beverages contributed 8.94 percentage points to the annual inflation rate, transportation 5.22 points, and housing 5.21 points.
On a monthly basis, transportation prices rose 2.59%, housing costs increased 2.25%, and food and non-alcoholic beverage prices climbed 1.61%.
China’s Alibaba on Monday introduced its largest and most capable AI model to date, sending its shares higher, while a research firm reported that DeepSeek’s newest product features pricing more than 100 times cheaper than Anthropic’s Claude Fable 5.
The two developments highlight the rapid pace of advancement in artificial intelligence by Chinese tech firms, which are locked in a fierce and fast-moving battle to build more powerful systems without making them prohibitively expensive to run.
Both models – Alibaba’s Qwen3.8-Max and DeepSeek’s V4-Flash – underline Chinese commitment to open-weight models as the firms seek to gain traction among developers globally.
“Chinese AI companies have found an important market. Many business workflows do not need the industry’s very best model,” said Lian Jye Su, chief analyst at research firm Omdia.
“They need models that are good enough, affordable, transparent and accessible, and open-weight models help meet that demand.”
With an open-weight model, the underlying learned settings that allow developers to run or adapt the system are available for download. By contrast, OpenAI, Anthropic and Google have closed-source models.
Trillions of parameters
Alibaba’s new Qwen3.8-Max immediately shot up leaderboards assessing the capabilities of AI models after being unveiled on Monday, helping its shares jump 7% in Hong Kong trade.
The model has 2.4 trillion parameters, the numerical settings a model learns from data and uses to recognize patterns, generate answers, and carry out tasks. That puts it not too far behind domestic rival Moonshot AI’s Kimi K3, which was launched last month and has 2.8 trillion parameters.
A higher parameter figure does not automatically make a model better, but it has become a closely watched measure of the scale of the computing and data behind advanced AI systems.
Qwen3.8-Max was unveiled on crowdsourced, model-comparison platform Arena.AI. It soon became the highest-ranking Chinese model in terms of text models, though it still lags Claude Fable 5 and three Opus variants, which are all from Anthropic.
On Arena.AI’s leaderboard for AI models that analyse images and other visual material, Qwen3.8-Max ranked second globally, only behind a Claude Fable 5 variant.
Both Qwen3.8-Max and Kimi K3 can handle text, images and video, and process up to 1 million tokens at a time.
Tokens are chunks of data, often parts of words or short words, and a big figure means the model can take in large amounts of material in one go, such as long legal files, a large software codebase or hundreds of pages of documents.
The tech giant said the model, due to be released next week, completed a software-engineering project in 16 days. It uses a “mixture-of-experts” design, which divides work among specialized parts of the system instead of switching on the entire model for every request. Only 95 billion parameters are used at a time, reducing costs and response delays.
Ultra-cheap DeepSeek
DeepSeek’s V4-Flash model, released on Friday, is by far the least expensive to run on benchmark tests among well-known models globally, according to research firm Artificial Analysis.
The startup, which sources have said is preparing for a potential IPO, saw its R1 and V3 models become a global sensation in early 2025, triggering a sell-off in global tech stocks and raising questions about the large amounts U.S. companies were spending on AI.
V4-Flash charges $0.14 per million input tokens and $0.28 per million output tokens, according to San Francisco-based Artificial Analysis.
Artificial Analysis estimated V4-Flash’s average cost at 3 cents per test, compared with 86 cents for Kimi K3, $1.86 for OpenAI’s GPT-5.6 Sol and $3.15 for Claude Fable 5.
The comparison provides a more realistic measure of value than pricing alone because it accounts for the amount of data a model must process and generate to complete a task. A model with a low headline price can still prove expensive if it requires significantly more steps to produce an answer.
Türkiye’s crude steel production rose 8.1% on an annual basis to 19.8 million metric tons in the January-June period, according to a report on Saturday referring to the data from the Turkish Steel Producers Association (TÇÜD).
In June alone, crude steel output increased 14.7% from the same month last year to 3.3 million tons, information obtained by Anadolu Agency (AA) from TÇÜD showed.
Final steel product consumption increased 0.4% year-on-year in June to 3.1 million tons, while consumption in the January-June period rose 6.6% to 19.9 million tons.
Steel exports rise
Steel product exports also increased 28.4% by volume in June from a year earlier to 1.7 million tons, while their value climbed 29.7% to $1.2 billion.
In the first six months of the year, exports rose 2.5% by volume compared with the same period of 2025, reaching 7.8 million tons, while export value increased 1.3% to $5.3 billion.
Imports decline in June
At the same time, steel product imports fell 0.8% by volume in June from a year earlier to 1.8 million tons, although their value increased 3.7% to $1.2 billion.
In the January-June period, imports edged up 0.3% by volume year-on-year to 9.3 million tons, while their value declined 2.4% to $6.3 billion.
The ratio of exports to imports improved from 80% in the first half of last year to 83% in the same period this year.
7th largest steel producer
TÇÜD Secretary-General Veysel Yayan said Türkiye maintained its position as the world’s seventh-largest crude steel producer, remaining ahead of Germany.
He noted that the decline seen during the first five months of the year was reversed by the strong performance in June, driven particularly by robust demand from the Middle East and South America.
According to Yayan, steel exports to the Middle East surged 80% in June to 212,600 tons, while exports to South America jumped 406% to 182,500 tons.
He added that the U.K., where exports rose 246% to 407,000 tons in the first six months, and South America, where exports increased 81% to 643,000 tons, stood out as the strongest markets.
In contrast, the European Union market remained weak. Exports of steel products to the bloc fell 22% in the first half of the year to 2.6 million tons, making the EU the only regional market where exports declined.
“In the coming period, the Turkish steel sector needs to create long-term and cost-effective financing models to achieve its goals of transforming its current production capacity into a higher value-added, technology-oriented and sustainable structure, and accelerating investments in energy efficiency, low-carbon production and technological modernization,” Yayan said.
The U.S. and Japan are said to have jointly intervened to prop up the Japanese yen for the first time in nearly 30 years after the currency plunged to its weakest level in decades, media reports, including initial Financial Times (FT) reporting, indicated.
The reported intervention came after the yen slid to 163.24 per dollar last month, its weakest level since 1986, as higher U.S. interest rates, rising oil prices and persistent capital outflows weighed on the currency.
The newspaper reported, citing people familiar with the matter, that the Federal Reserve Bank of New York took the unusual step of selling euros to buy yen on behalf of the U.S. Treasury on Friday.
The transactions were carried out through Goldman Sachs and Morgan Stanley, according to the Financial Times.
Washington’s move came as the yen rebounded sharply last week, fuelling speculation that Japanese authorities had also intervened in currency markets.
The unit was trading at 160.53 against the dollar on Friday, having risen as high as 158 yen a day earlier.
Meanwhile, a Reuters report on Sunday said that Japan was to announce that Tokyo and Washington indeed took joint action on yen as soon as Monday.
Japanese Finance Minister Satsuki Katayama will announce on Monday that Tokyo and Washington took joint action to arrest the yen’s slide to 40-year lows, two Japanese government officials told Reuters.
“Whether Tokyo was actually involved remains unclear, but the price action had all the familiar fingerprints,” Stephen Innes at SPI Asset Management wrote in a comment.
Analysts cited by FT estimated Japan’s intervention may have totalled about 8.45 trillion yen ($52.8 billion).
The Nikkei business daily put the amount at between 6 trillion and 7 trillion yen.
According to FT, the move would be the first coordinated U.S.-Japan effort to support the yen since 1998.
A recent Reuters photo of U.S. Treasury Secretary Scott Bessent’s notepad during a cabinet meeting at Camp David in Maryland showed the words “To Do,” followed by “Buy Japanese Yen (JPY) $5-10 bil.” The Treasury did not respond when approached to comment on the matter.
While surging oil prices and concerns over debt are major reasons for the yen’s weakness, a key driver is the wide gap between interest rates in Japan and those in the U.S. and other major economies.
And with markets increasingly betting that the U.S. Federal Reserve (Fed) could hike rates again before the end of the year, the divergence is more pronounced.
This gap has encouraged investors to borrow cheaply in yen and invest in other assets outside Japan with better returns, commonly known as a “carry trade,” resulting in capital outflows and downside for the yen.
Türkiye’s domestically developed fifth-generation fighter jet has successfully completed the pre-flight taxi test of its latest prototype, its developer said Friday.
Footage on social media showed the Kaan warplane conducting the ground test, with technical personnel present as the aircraft taxied under its own power.
Turkish Aerospace Industries (TAI) said the test was completed successfully but did not disclose additional technical details.
Kaan is Türkiye’s indigenous fifth-generation multirole fighter being developed to meet the operational requirements of the Turkish Air Force and is expected to replace the aging F-16 fleet over the coming decades.
The aircraft made its maiden flight in February 2024, remaining airborne for 13 minutes. It completed its second test flight in May the same year, during which it flew for 14 minutes, reached an altitude of 10,000 feet and a speed of 230 knots.
Following the initial flight, the program entered a phase of production of additional prototypes that will continue the aircraft’s flight-test campaign.
Testing and development activities are continuing with the P1 and P2 prototypes, which feature a more advanced systems architecture.
According to TAI, Kaan is designed to provide air superiority through extended beyond-visual-range air-to-air combat capability, precision strike missions using internally carried weapons at high and supersonic speeds, and advanced combat performance supported by AI and neural network technologies.
The twin-engine fighter is being developed as a fifth-generation multirole platform capable of conducting both air-to-air and air-to-ground missions.
Türkiye plans to deliver the first batch of Kaan jets to the Turkish Air Force by the end of 2028, while a domestically developed engine is expected to power the aircraft in the 2030s.
Türkiye’s foreign trade deficit widened more than 26% last month, despite exports seeing their highest-ever June figure, official data showed Friday.
Outbound shipments jumped 21.7% year-over-year to $24.92 billion (TL 1.18 trillion) in June, the third-highest monthly export total ever, Trade Minister Ömer Bolat said.
Imports increased 23% from a year earlier to $35.29 billion, provisional figures from the Turkish Statistical Institute and the Trade Ministry showed.
The trade gap widened 26.2% year-over-year to $10.37 billion.
The export-to-import coverage ratio fell to 70.6% from 71.4% in June 2025.
Excluding energy products and non-monetary gold, exports climbed 23.2% to $23.3 billion, while imports rose 24.3% to just over $28 billion.
The energy- and gold-excluded trade deficit stood at $4.71 billion, with the export-to-import coverage ratio at 83.2%.
Manufactured products accounted for 93.7% of total exports in June, while agriculture, forestry and fishing represented 3.5% and mining and quarrying 2%.
Intermediate goods made up 71.4% of imports, followed by consumer and capital goods, each with a 14.2% share.
Germany was Türkiye’s largest export market in June, receiving $1.97 billion worth of goods. It was followed by the U.S. with $1.54 billion, Italy with $1.35 billion, the U.K. with $1.26 billion and Spain with $1.12 billion.
China was the leading source of imports with $5.28 billion, followed by Russia, Germany, the U.S. and Italy.
In the first half of the year, exports increased 3.5% year-over-year to $135.98 billion, while imports rose 4.6% to $189.12 billion.
The January-June trade gap widened 7.4% to $53.14 billion.
Annualized exports rose 4.1% year-over-year to $277.9 billion as of June, up by $11 billion from $266.9 billion a year earlier, Bolat said.
Exports of medium-high- and high-technology products increased 8.4% in the first half to $56.2 billion.
Despite geopolitical tensions, protectionist measures and weak external demand, Türkiye will continue working to exceed the Medium-Term Program’s export target of $282 billion, Bolat added.
Türkiye’s annualized tourism revenue remained broadly stable in the second quarter despite the Middle East conflict, Treasury and Finance Minister Mehmet Şimşek said Tuesday.
Şimşek said resilient services exports helped limit the impact of the Iran war on Türkiye’s external balance.
The comments came after data from the Turkish Statistical Institute (TurkStat) showed tourism revenue in the first half of the year edged down 0.1% year-over-year to $25.75 billion (TL 1.22 trillion).
In the April-June period, the income declined 2.6% year-over-year to $15.87 billion.
Of the total, $15.66 billion came from visitor spending, while $209.5 million was generated by transfer passengers. Turkish citizens residing abroad accounted for 15.6% of visitor-related revenue.
Separate data by the Culture and Tourism Ministry showed visitor arrivals fell about 2.4% to 25.76 million in the first six months. That’s combined with Turkish citizens residing abroad, whose arrivals rose slightly to almost 5 million.
The number of foreign visitors declined 2.96% to 20.77 million, the data showed. In June, the count fell 4% from a year earlier to 5.54 million.
Culture and Tourism Minister Mehmet Nuri Ersoy echoed Şimşek’s view, saying Türkiye had maintained its stability in tourism despite the negative effects of the war.
“We believe we have left the most challenging quarter of this year behind us,” Ersoy said.
Spending increases
Despite the weaker visitor numbers, spending per visitor increased.
Average spending per visitor increased 2.5% to $1,005 in the second quarter, while average spending per night rose 2.8% to $113, the TurkStat data showed.
In the first six months, average spending per visitor rose 2.5% to $1,020, while average spending per night increased by the same rate to $108.
Commenting on the figures, Şimşek said annualized tourism revenue stood at $65.2 billion in the second quarter, maintaining the level recorded in 2025 despite adverse geopolitical developments.
“Although the number of visitors declined slightly, average spending per visitor increased compared with last year,” Şimşek wrote on the social media platform X.
“As a result, the negative effects of the war on the current account through services exports were limited. Thanks to the structural improvements achieved under our economic program, we expect the current account balance to remain at sustainable levels,” he added.
Support for tourism sector
Şimşek said the government was continuing measures to cushion the tourism industry from geopolitical tensions.
He said the accommodation tax had been reduced to 1% from 2%, while an additional TL 60 billion in Treasury-backed financing had been made available under the Tourism Support Package.
The government is also providing a monthly TL 1,270 minimum wage subsidy per employee and an additional TL 3,500 monthly social security premium support for workers employed at facilities holding tourism operating licenses, he said.
Şimşek added that the government would continue policies aimed at expanding higher value-added segments such as health, congress, cultural and sports tourism, extending tourism activity throughout the year and strengthening the sector’s international competitiveness.
Meanwhile, outbound tourism spending by Turkish residents rose 7.4% year-over-year to $2.96 billion in the second quarter, the TurkStat data showed.
The number of Turkish residents traveling abroad increased 16.5% to 3.43 million, with average spending per traveler reaching $863.
-
Politics3 days agoErdoğan reaffirms Türkiye’s support for Lebanon, urges regional stability
-
Refugees3 days agoZelenskyy asks Trump for help on Starlink push
-
Politics3 days agoDistrict mayor in Ankara detained on corruption charges
-
Politics3 days agoFM Fidan meets TRNC Prime Minister Üstel in Ankara
-
Politics3 days agoCorruption probes into CHP-run municipalities continue to widen
-
Politics3 days agoTurkish parliament speaker says terror-free bill will open ‘new era’
-
Politics3 days agoAnkara says stronger Iraq defense ties vital for regional stability
-
Sports3 days agoDjokovic looks to Cincinnati to fuel record 25th Grand Slam bid