Economy
Türkiye’s trade deficit narrows by 12.1% in July
Türkiye’s trade deficit shrank 12.1% year-on-year in July, Trade Minister Ömer Bolat announced Saturday.
Bolat said exports rose to $25 billion in July, while imports stood at $31.4 billion. He made the comments during a press conference in Samsun.
“The decline in foreign trade deficit was thanks to a strong export performance and controlled import growth,” he said.
In the January-July period of 2025, exports for the first seven months reached $156 billion, while exports for the last 12 months rose to $269.5 billion.
According to Türkiye Exporters’ Assembly (TIM) President Mustafa Gültepe, the $2.5 billion increase in July exports was due to parity in automotive and chemical sectors.
“We are certainly not complaining,” Gültepe said. “But for stable and sustainable growth, we need to bring all sectors into the game.”
July marked Türkiye’s highest monthly export value on record, climbing 11% compared with the same month last year. Service exports are estimated to have reached $11.8 billion.
Automotive led the way with $3.8 billion in exports, followed by chemicals ($3.4 billion), ready-made clothing ($1.58 billion), electrical and electronics ($1.57 billion), and steel ($1.4 billion).
Seventeen sectors posted export growth, while nine saw declines. The top exporting provinces were Istanbul, Kocaeli, Ankara, Bursa, and Izmir, with Ankara, Bolu, Çankırı, Edirne, and Muğla hitting record monthly figures. In July, 1,180 companies exported for the first time.
Türkiye’s main export destinations were Germany, the U.K., the U.S., the UAE, and Italy. Exports to 52 countries rose more than 50%, while 107 countries saw growth above 10%. Overall, exports increased to 137 countries.
Gültepe welcomed the Central Bank’s recent 300 basis point interest rate cut, describing it as a “positive step” toward boosting competitiveness. He also praised the extension of the 3% foreign exchange conversion support.
Focus on U.S. market
On U.S.-Türkiye trade, Gültepe criticized Washington’s decision to raise additional tariffs on Turkish goods from 10% to 15%, calling it “unfortunate.” However, he said TİM remains focused on increasing its share in the U.S. market.
“If we can return to the competitiveness of 2–3 years ago, we can turn our partial advantage into an opportunity,” he said, stressing the need for persistent trade diplomacy with the U.S.
Saudi Arabia has decided to move the hosting of its flagship investment conference to next year, organizers confirmed on Monday, following recent deadly attacks by Houthis on the kingdom, as the Middle East conflict widens, posing fresh challenges for businesses in the region.
The Future Investment Initiative (FII) was planned for Oct. 26 to 29, but will now take place in 2027, with a new date to be announced “very soon,” the organizers said.
Reuters reported earlier Monday that the in-person event had been scrapped and organizers were weighing postponing the event.
The conference, set for its 10th edition, has become a must-attend event for some of the world’s top financiers.
Informally dubbed “Davos in the Desert,” in a nod to the World Economic Forum’s (WEF) annual meeting in Switzerland, the state-backed annual event has showcased the kingdom’s ambitious investment plans in a bid to attract billions of dollars needed to fund its economic transformation away from hydrocarbons towards tourism, sports and technology.
Expected speakers for this year’s event included Goldman Sachs CEO and Chairman David Solomon, Standard Chartered CEO Bill Winters and Citi’s CEO Jane Fraser, according to a draft program.
The U.S.-Israeli war with Iran this year has disrupted the Gulf’s busy calendar of events, with several conferences canceled, postponed, or retooled in the UAE and Qatar in the first part of the year, when the countries bore the brunt of the attacks while Saudi Arabia suffered fewer hits.
The kingdom in recent weeks has faced an escalating war with Yemen’s Iran-aligned Houthis, which have struck military, energy and civilian infrastructure across the country, including the state oil company Aramco’s headquarters and Riyadh’s international airport, where strikes killed at least 18 people and hundreds were wounded this month.
FII said it wanted to ensure the event delivered “the full scale, extraordinary quality, and unforgettable impact that our community has come to expect.”
Reuters reported last week that the FII organizers considered a hybrid format, allowing executives to tune in remotely.
Semafor reported on Monday that big banks and private-equity firms have privately relayed safety concerns about attending the event to Saudi Arabia’s Public Investment Fund (PIF) Governor Yasir Al-Rumayyan, adding that CEOs feel pressure to attend the four-day event.
Türkiye expects the Development Road, a planned trade corridor linking the Persian Gulf to Europe through Iraq, to add about $55 billion to its economy over 10 years once completed, a senior official said Monday.
The project should also create jobs for roughly 70,000 people a year, Transport and Infrastructure Minister Abdulkadir Uraloğlu said.
Uraloğlu was speaking in Ankara at a conference on changing global transport geopolitics and the Development Road project.
Cargo leaving Iraq’s Faw Port, on the Gulf coast in Iraq’s far south, would travel about 1,200 kilometers (745.65 miles) by rail to Ovaköy, a crossing on the Türkiye-Iraq border in southeastern Türkiye. From there, it would continue across Türkiye toward Europe. The initiative was unveiled in May 2023 and is estimated to cost $20 billion.
Jobs from logistics, production hubs
Uraloğlu said the jobs would come from production and logistics centers built along the route.
The project also includes energy transmission lines and fiber optic infrastructure alongside the rail and road links, and officials hope it will further deepen economic ties between Türkiye and Iraq.
He also said transit from the Gulf to Europe along the route would fall to about 25 days.
That compares with 45 days around the Cape of Good Hope, off Africa’s southwestern coast, and 35 days via the Southern Corridor.
Lower logistics costs, Uraloğlu added, would make Turkish exporters more competitive and strengthen Türkiye’s position in global trade.
Officials have repeatedly tied the project to instability around the Strait of Hormuz.
The strait is the narrow waterway at the mouth of the Persian Gulf through which much of the world’s oil was shipped before the Iran war started.
Uraloğlu had said that had the Development Road been completed, the world’s energy supply would have been far less affected, and that the project would be started quickly after the war ends.
Transit push
The Development Road forms part of Türkiye’s wider push to become a transit hub between Asia and Europe. It complements the Middle Corridor, the route across Central Asia and the Caucasus, and Ankara has described both as central to Türkiye’s strategy.
Earlier this month, Türkiye opened the Çerkezköy-Kapıkule section, the longest part of the Halkalı-Kapıkule high-speed rail line, extending the network to the Bulgarian border.
The line is 229 kilometers long. It begins on Istanbul’s western edge and ends at Türkiye’s main rail and road border crossing with Bulgaria, at Kapıkule near the northwestern city of Edirne.
President Recep Tayyip Erdoğan said the line is a key component of the 2,094-kilometer Turkish section of the Development Road. The line extends the European end of the same network.
Türkiye’s top economic officials on Monday discussed, among others, the winding down of investment funds caught up in last month’s turmoil.
A statement after the meeting of the Economic Coordination Board (EKK) said payments to investors in the funds should start soon after Parliament passes a liquidation bill, which is due to be debated this week.
The board, chaired by Vice President Cevdet Yılmaz, also reviewed education and labor-market policy and revisions to balance of payments statistics.
The Fund Coordination Board said Sunday that authorities have settled about half of the funds ordered to be wound down. All 66 funds run by A1 Capital, Bulls and Pardus have been settled, covering more than 45,000 people and TL 40.8 billion ($823.37 million) in cash and in kind.
The goal this week, the board said, is to pay the largest number of participants, primarily those in money market funds. The remaining funds belong to Tera, Pusula, Hedef and Atlas.
The bill governing liquidation of the troubled funds has been submitted to Parliament and approved by its Planning and Budget Committee, the EKK said. Interim payments are expected to begin as soon as possible once it enters into force.
The crisis erupted last month after several funds said they could not meet investors’ redemption requests during a market sell-off, prompting a wide investigation into suspected price manipulation in thinly traded stocks.
The Capital Markets Board (SPK) suspended trading in 131 funds run by seven asset management companies, affecting nearly half a million investors.
Prosecutors have issued asset freezes and travel bans and have arrested more than 80 people, including the top executives of the asset management companies.
Economic outlook
The EKK said Türkiye’s strong macroeconomic fundamentals and firmly applied policies should keep the impact of recent developments on the financial system and the real economy limited. The measures taken are meant to make capital markets more reliable and efficient, it said.
The statement described the global economy as passing through a period of multiple shocks, with uncertainty and risk at historically high levels. Supply shocks and supply chain disruptions driven by the Iran war are weighing on the global outlook, it said, making economic resilience and stability more important.
Türkiye’s economic program has made growth more balanced, lowered unemployment and inflation, strengthened financial stability and established fiscal discipline, according to the statement. The government’s aim now is to protect those gains while raising production capacity, productivity and competitiveness.
Education, jobs
The board named raising the quantity and quality of education, and linking education more closely to employment, as priorities, noting that education has had the largest share of the budget for years.
It said green, digital and demographic change are reshaping labor-market needs, so education and employment policies must keep pace with technology and sector needs.
The government wants to increase the supply of skilled workers where they are needed, support productivity and encourage groups that struggle to enter the labor force, especially young people and women, to find work.
Balance of payments
The board also assessed how revisions to balance of payments statistics affect the “net errors and omissions” line, which captures transactions the statistics do not record.
The EKK includes the ministers of finance, trade, labor, energy, industry and agriculture, along with senior officials from other key economic institutions, including the central bank.
Insurance companies have set aside nearly TL 2 billion (about $40.4 million) as of Monday to cover damage from last week’s record rainfall and flooding in Istanbul and five other provinces, according to the Insurance Association of Türkiye.
The amount is an estimate of what insurers expect to owe on filed claims, and only a small fraction has been paid so far.
The historic rainfall, which officials said was the heaviest since records began in 1942, caused chaos and flash flooding, with footage showing cars and people being dragged away by the fast-flowing waters.
Six died in Istanbul, while the bodies of two more people from the neighboring Kocaeli province were washed up on the southeastern outskirts of the megacity, Istanbul governor Davut Gül told reporters on Monday.
So far, authorities have received nearly 20,000 reports about property damage as a result of the torrential rainfall and the resulting floods, Gül said.
“We experienced a disaster that generated around 19,300 reports, each with different types of problems. At this point, it has been determined that around 2,000 homes and about 900 businesses … have suffered serious damage,” he said.
On Friday, the authorities paid out TL 10,000 to 5,200 affected residents and were to pay out the same amount to another 2,500 people on Monday, he said.
The amounts insurers estimate they will owe on filed claims as of Monday stood at over TL 1.9 billion across 2,379 damage files under flood and inundation coverage in fire and motor policies, a report by Anadolu Agency (AA) said.
The affected provinces are Istanbul, Kocaeli, Yalova, Bursa and Sakarya in northwestern Türkiye’s Marmara region, and Antalya on the Mediterranean coast in the south. Kocaeli lies just east of Istanbul, and Sakarya lies further east.
In the fire branch, which covers fire, natural disaster and home insurance, insurers reserved nearly TL 1.56 billion for 1,638 files. In the motor own-damage branch, they reserved TL 345.75 million for 741 files.
Istanbul has the largest share in both. In fire insurance, reserves for Istanbul reached about TL 1.39 billion and for Kocaeli about TL 164 million. In motor insurance, Istanbul’s reserves were about TL 312 million.
Insurers have paid 13 claims totaling TL 389,535 in the fire branch. No payments have been made yet in the motor branch.
Policyholders have filed 2,453 damage notifications in all: 1,703 in the fire branch and 750 in the motor branch.
In fire insurance, Istanbul has 1,486 notifications, of which 12 files have received payments totaling TL 382,886. By segment, residential policyholders filed 821 notifications and 11 were paid, totaling TL 378,263. Commercial policyholders filed 563 and one was paid, totaling TL 4,623. The 102 industrial notifications have received no payments yet.
Kocaeli has 179 fire notifications, with one payment of TL 6,649 on a residential claim. Yalova filed 18, Antalya 14 and Bursa six.
In motor insurance, Istanbul has 670 notifications, Kocaeli and Antalya 35 each, Sakarya nine and Yalova one. Bursa has none.
Paris and Milan stocks spearheaded a decline in European markets on Monday, as intensifying violence in France and street clashes in Italy’s financial hub heightened concerns about mounting debt levels.
Most sectors were dragged lower, while there was renewed selling of bonds and the euro.
However, tech stocks led a rebound on Wall Street on Monday, with the Nasdaq Composite climbing 1.0% as trading got underway in New York.
“There was no mistaking that last week was a tough week for the semiconductor and AI trade,” said Briefing.com analyst Patrick O’Hare.
Concerns about rising investment costs and whether the vast sums pumped into the sector would see a return dominated sentiment, with investors dumping the stocks and bonds of a company providing computing power for AI firms.
“Staying true to form, though, there is a buy-the-dip bid in those stocks this morning,” O’Hare added.
Whether that rebound continues may depend on tech firm earnings and their message about AI investment as more companies report their third-quarter earnings this week.
“Earnings this week will be crucial to broader risk sentiment. In particular, (Facebook parent) Meta is in focus as the first of the five major hyperscalers to report,” said Saxo UK investor strategist Neil Wilson.
‘Worst of it’
In Europe, Paris stocks dropped 1.7% and Milan fell 1.8% in afternoon trading.
“European shares were broadly weaker, but France and Italy are getting the worst of it,” noted Saxo’s Wilson.
France’s President Emmanuel Macron on Sunday slammed the “unbridled” violence that erupted alongside cost-of-living demonstrations across the country, as police battled protesters and looters in new clashes in Paris.
Nearly 2,400 people were arrested Saturday in unrest that represented some of the worst urban violence in France in years, with almost 1,000 police injured, the interior ministry said.
It comes as the country’s lawmakers wrangle over a 2027 budget plan that calls for billions of euros in spending cuts but which keeps France’s debt levels extremely high.
In Italy, Prime Minister Giorgia Meloni was holding a security meeting Monday to address the Milan violence, which resembled some scenes of chaos and looting in Paris.
Oil prices pulled back Monday on signs that supplies continued to leave the Middle East despite Iran’s chokehold on the Strait of Hormuz and ongoing attacks by Yemen’s Houthis on key Saudi Arabian crude sites.
U.S. President Donald Trump’s decision to waive a new package of energy sanctions on Russia also weighed on oil futures, according to analysts.
Jakarta’s stock market sank over 5% on Monday, extending Friday’s plunge of more than 11%, to close at its lowest level in six years.
It came after index compiler MSCI said it was “no longer appropriate” to maintain the country’s emerging-market status, fuelling fears of an exodus of foreign investment.
The head of the Turkish capital markets regulator stepped down on Monday, citing health problems while the country’s deputy finance minister has asked to retire with immediate effect, media reports said.
The chief of the Capital Markets Board (SPK), Mahmut Sütçü, who assumed the post earlier this year, resigned, reports, including Anadolu Agency (AA), said.
Deputy Treasury and Finance Minister Osman Çelik has also tendered his resignation to the Treasury chief, Mehmet Şimşek, according to the information obtained from ministry sources.
The departures come amid the last month’s turmoil affecting Türkiye’s investment fund industry.
The crisis began after several funds said they could not meet investors’ redemption requests during a market sell-off. That prompted a wide investigation into suspected price manipulation in a number of thinly traded stocks.
SPK quickly suspended trading in 131 funds run by seven asset management companies and placed them into liquidation, affecting nearly half a million investors.
Authorities have also established a special board to coordinate the process and the board held its sixth meeting on Sunday, the Communications Directorate said.
The Turkish main stock index BIST 100 dropped 2.49% to close at 11.430,14 points on Monday.
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