Türkiye expects its annual budget deficit to have narrowed to around 2.5% of gross domestic product (GDP) as of June, down from 2.9% in 2025, Finance Minister Mehmet Şimşek said Monday.

Şimşek cited stronger fiscal discipline despite revenue losses from measures aimed at containing inflation that rose amid a fallout from the Iran war.

Last week’s official data showed Türkiye’s central government budget shifted to a surplus by posting an excess of TL 114.2 billion (around $2.4 billion) in June.

Revenues jumped 66.0% year-over-year to nearly $32.1 bilion in current prices, fueled by a 72% increase in tax collections, data from the Treasury and Finance Ministry showed. Expenditures rose 12.6% to some $29.7 billion.

In the January-June period, the budget posted a deficit of $20 billion, compared with a gap of around $20.8 billion a year ago. Expenditures rose 32.7% year-over-year to $185.5 billion, while revenues increased 39.1% to $165.5 billion.

The primary balance, which excludes interest payments, registered a surplus of TL 521 billion in the first half of the year, Şimşek said.

The overall gap, meanwhile, improved by TL 38 billion lira compared with the same period last year, he wrote on the social media platform X.

He added that the improvement came despite the government’s decision to forgo some tax revenues to limit the inflationary impact of geopolitical developments.

In June, the primary balance registered a surplus of $6.7 billion, compared with a deficit of $1.15 billion in the same month last year.

Tax revenues surged 72% year-over-year last month to $28.05 billion. Income tax revenues rose 145.7%, domestic value-added tax (VAT) receipts increased 89.6%, and value-added tax collected on imports climbed 53.1%.

Meanwhile, corporate tax revenues increased 31.8%, and special consumption tax receipts edged down 0.1%.

Şimşek attributed the stronger fiscal performance to efforts to combat the informal economy, policies to increase voluntary tax compliance and tighter control of public spending.

“Thanks to the fight against the informal economy, policies to increase voluntary compliance and discipline in public expenditures, we estimate that the budget deficit-to-GDP ratio, which stood at 2.9% in 2025, declined to around 2.5% on a rolling annual basis as of June,” he wrote on X.

He added that the stronger budget performance had also helped keep domestic debt rollover ratios below both last year’s levels and official projections.

“Budgetary discipline, which enhances the resilience of our economy, is also of critical importance for price stability, the primary objective of our program. We will continue to implement policies aligned with our disinflation target while maintaining fiscal discipline,” Şimşek said.

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Alibaba’s AliExpress was hit with a record fine of 550 million euros ($629 million) by ⁠the European Union on Monday for failing to ⁠tackle sales of illegal, unsafe and counterfeit products on its platform.

The fine was the third issued by the European Commission under the EU’s landmark Digital Services Act, which requires very ​large online platforms to do more to counter illegal and harmful content.

The ​Commission ⁠charged AliExpress in June last year with failing to comply with a DSA requirement to assess and mitigate the risks of the dissemination of illegal products.

It set an Oct. 20 deadline for AliExpress to propose remedial measures, and the company could face further penalties if the regulator decides in December that they do not comply with the DSA.

“This is very dangerous for consumers, unfair for companies which are complying with all our rules,” EU tech chief Henna Virkkunen told reporters.

She pointed to AliExpress’s 193 million users in Europe last year, versus Shein’s 156 million and Temu’s 130 million. Temu has also been fined under the DSA and Shein is facing an ongoing investigation.

“One in five Europeans say they shop once ⁠a ⁠month from Shein, Temu and AliExpress,” Virkkunen said.

AliExpress criticized the EU fine, saying it was excessive.

“We disagree with today’s decision and the disproportionate fine, which does not adequately reflect our established framework and the significant, proactive enhancements we have made,” AliExpress said in an email.

“We are carefully reviewing the decision and considering all available options.”

AliExpress penalty higher than fines for Musk’s X and Temu

The Commission said that AliExpress had not properly evaluated whether it had enough people to review the risks and had overestimated the effectiveness of its system in detecting and removing illegal products.

The regulator criticized ⁠the company’s recommender and advertising systems for exacerbating the spread of illegal products and its reliance on one quantitative indicator to measure its moderation system to prevent the risk of illegal products appearing or reappearing in similar forms.

It said the failure ​of AliExpress to detect illegal products meant that illegal products, ranging from counterfeit products to unsafe toys and ​dangerous cosmetics, remained online for many weeks.

The Commission also took issue with the company’s ineffective penalty policy, which resulted in penalised businesses continuing to sell illegal products on its platform.

It said ⁠that the ‌mandatory AliExpress “brand ‌authorization” system – intended to prevent counterfeit sales – was ineffective and understaffed and was ⁠easily circumvented by traders selling fake products.

The regulator said the novelty ‌of the DSA was a mitigating factor in calculating the fine, which could have been higher. The penalty is significantly higher ​than the 120 million euros handed out to Elon ⁠Musk’s social media platform X in December last year and the 200 million euros ⁠Temu was fined last May, both for DSA violations.

AliExpress dodged a fine, which could be as ⁠much as 6% of its global ​annual turnover, in June last year after agreeing to measures to tackle the dissemination of potentially illegal and pornographic materials on its platform.

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Five years ago, PayPal was a Wall Street darling and a digital payments leader. Since then, its stock has tumbled, Apple Pay has come to dominate U.S. payment services, and the company is now confronting an unwelcome takeover bid. What comes next?

The company synonymous with digital payments this past week got a $53 ⁠billion offer to be taken private by upstart rival Stripe and buyout shop ⁠Advent International. PayPal’s board is discussing the bid but believes $60.50 a share is not enough, people familiar with the company said.

It is a comedown for a company that helped to pioneer e-commerce and email-based payments, launching the careers of tech titans Elon Musk and Peter Thiel in the process.

Founded in 1998, the San ​Jose, California, firm was acquired by eBay in 2002 and spun off as an independent company in 2015. Continued growth ​pushed ⁠its market value as high as $360 billion in 2021.

But since then, its growth has slowed, and competition intensified, while multiple attempts in recent years to jumpstart its business have borne little fruit.

Dealmakers are now weighing the value of PayPal’s sprawling payments ecosystem, from its 400 million-plus consumer accounts to its merchant checkout business, raising the question of whether the company is worth more as a single entity or as a collection of assets, such as the Venmo peer-to-peer payment app, that could be sold off in pieces.

In February, when the company named a new CEO, it acknowledged a need to address its position relative to competitors and within the broader industry landscape.

“While some progress has been made in a number of areas over the last two years, the pace of change and execution was not in line with the Board’s expectations,” it said in a statement.

Enrique Lores, who took over as CEO in March, has not commented on whether PayPal would pursue a sale.

Paypal misses beat on new opportunities

While bigger rivals such as Apple, Google and Samsung and upstarts including Stripe and Affirm relentlessly rolled out new ways for consumers and businesses to pay for goods and services, analysts say PayPal was slow ⁠to explore ⁠opportunities in digital banking and commerce, or to offer fresh options when more people were using their phones to pay.

“Why bother becoming a digital bank if you can just be the world’s biggest checkout button?” said Dan Dolev, senior analyst at Mizuho. “I think it was too easy to drink the honey straight from the checkout jar.”

Investors and industry executives are frustrated with PayPal’s performance, said one source familiar with the company’s deliberations. PayPal started before the iPhone even existed, but last year Apple Pay’s U.S. market share exceeded PayPal’s by 10 percentage points, according to PYMNTS Intelligence, a research company.

PayPal has also lagged many rivals in adopting AI and pushing into agentic commerce, in which AI agents negotiate and complete purchases on a user’s behalf.

Owen Lau, an analyst at financial services firm Clear Street in New York, said PayPal prioritized winning market share by pricing aggressively, but failed to charge enough to generate attractive returns. Clear Street began coverage of PayPal this past week with a hold rating and a price target of $61 a share, compared with ⁠a $57.09 stock price on Friday.

Lau added that growth has slowed across key parts of the business, including Venmo, while newer products such as buy now, pay later have not panned out. PayPal’s user base has plateaued, he said, making growth a secondary concern to boosting profits from existing customers.

“They just want to win market share,” he said. “They’re not charging appropriately, and they’re losing momentum in other parts of the business.”

The company ​has had three CEOs in four years and this March embarked on its second turnaround effort since longtime chief Dan Schulman stepped aside in 2023.

Bid may be raised, but rival bids seen unlikely

Last year, according to a technology executive familiar with the matter, a deal with OpenAI to embed the PayPal digital wallet and processing into ChatGPT spurred a clash between the board and the executive team led by Alex Chriss, the CEO who succeeded Schulman. Chriss departed following Lores’ appointment, after the board asked ⁠to delay the deal.

Still, ‌the board is unlikely ‌to support a deal at $53 billion, said another person familiar with the company.

Some discussions at the board level have ⁠centered on whether the bid is enough to even warrant opening negotiations, the person said. The board is weighing ‌whether the company could be worth more based on its intent to hit milestones in its latest turnaround plan, the source added.

The sources spoke on condition of anonymity to discuss private deliberations.

Wall Street analysts believe Stripe and Advent ​can afford to pay more, and will. They have assembled $17 billion ⁠in equity, Reuters has reported, and have raised $50 billion in bank financing, potentially giving them the capacity to raise their offer.

The bidders’ decisions ⁠on price could be informed in part by what PayPal says this month when it reports quarterly earnings, with a weak report likely to increase pressure on PayPal and ⁠a strong one potentially encouraging a higher offer.

Competing ​bids for PayPal appear unlikely, however. Analysts at Morgan Stanley said this past week that Stripe and Advent International’s proposal would provide the “most credible path to value realization” for PayPal, which they said faces intense wallet competition and a maturing customer base.

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Central banks in Europe and Türkiye are heading into a week where they will deliver their latest decisions on monetary policy amid a fresh dilemma posed by the restart in tensions between the U.S. and Iran, which threaten to fuel energy price volatility and complicate the inflation outlook.

Both the European Central Bank (ECB), which oversees economic policy in the eurozone, and the Central Bank of the Republic of Türkiye (CBRT) are expected to hold interest rates on July 23, as conflict weighs on activity and adds fresh pressure on prices, analysts and polls suggest.

Still, markets would look at hints and predictions on the future inflation outlook for the remainder of the year, as well as for more details on what the policymakers currently consider to be the main sources of the strain.

After becoming the first among major banks to hike rates due to the U.S.-Iran war on June 11, the ECB is due to stay on hold this week but will hike for the second time this year in September as a renewed energy price surge raises the risk of more intense inflation pressures, according to a growing majority of ​economists polled by Reuters.

A 20% jump in oil prices following a re-escalation of war in the Middle East has prompted markets to price ‌in two more rate hikes this year, compared to one until the cease-fire arrangement between the U.S. and Iran abruptly ended.

The ECB has already raised rates once this year, unlike many of its peers, including the U.S. Federal Reserve (Fed), the Bank of England (BoE) and the Bank of Canada.

While preliminary official data showed eurozone inflation eased to 2.8% in June, that is still above the ECB’s ​2.0% target, keeping alive the case for higher rates. But weak growth and limited evidence of second-round effects argue for caution.

All 74 economists in the ​July 13-16 Reuters poll expected the ECB to leave its deposit rate unchanged at 2.25% next week, in line with market pricing.

A 70% majority of respondents, 52 ​of 74, expected one more rate hike this year, probably in September, up from around 60% in last month’s poll.

“The ECB probably would have needed to hike anyway, even if we hadn’t had all of this extra noise around the Strait of Hormuz over the past week or so,” said Chris Scicluna, head of economic research at Daiwa Capital Markets.

“Gas prices are ​significantly higher and electricity power prices are higher as well. The ECB is going to have to take account of this when it next updates its ​forecast in September. But for now, it will judge there’s no urgency for it to raise rates just yet again.”

Nearly 30% of economists still see rates unchanged for the rest ‌of the ⁠year, while only three expect two more hikes.

Policymakers have struck a cautious tone on inflation risks, particularly second-round effects, but have called for vigilance.

“The balance in the Governing Council today is slightly more on the side of the hawkish people, even though everybody knows pretty well that because of the growth momentum we have today in the euro area, they have to be very cautious with a policy rate hike,” said Alain Durre, head of Europe macro research at Natixis.

“It’s very ​difficult to be confident about anything right now. But it’s very clear to me the higher energy inflation goes … ​the bigger the risk ⁠of second-round effects on wages and subsequently prices as firms raise their prices to pay a higher wage bill,” said Simon Wells, chief European economist at HSBC.

“So yes, if we go into the September meeting with oil at $90 and still highly uncertain about where things are heading with possible upside risks to that, it may well be ⁠prudent for ​the ECB to hike again.”

The eurozone economy contracted 0.2% in the first quarter but was expected to ​have grown 0.2% last quarter and expand at a similar pace in this one and the next, the poll showed, putting 2026 growth at 0.5%. That marked a fourth straight downgrade to forecasts.

CBRT also expected to stay on hold

The CBRT, which has kept interest rates unchanged at 37% in its last three meetings, in line with expectations, and has not changed the overnight lending and borrowing rates, is similarly expected to remain cautious and keep the policy rate within the same range.

Even though most economists predict that the bank would stay at 37%, some forecasted that the Monetary Policy Committee (MPC) meeting could result in an additional interest rate cut of 100 to 150 basis points, a report by Sabah newspaper said.

According to a survey conducted by Matriks Haber with the participation of 33 economists, 32 of the participants predicted that the policy rate would remain at 37%, while only one economist predicted a 300 basis point cut, bringing the rate down to 34%.

Moreover, the median and average expectations regarding the timing of the first interest rate cut pointed to September.

Türkiye’s consumer price inflation moderated in June to the lowest level in three months, coming in at 32.1%, according to official data.

On a monthly basis, the prices increased 0.99% after rising 1.71% in May, coming in below a 1% rate for the first time since late 2025.

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The head of the top Turkish business association called on Sunday for a sustained continuation of the disinflation process, as he also urged strengthening of the selective financing and support for the real sector in the country.

Independent Industrialists and Businessmen’s Association (MÜSIAD) Chair Burhan Özdemir shared the business community’s main expectations for the upcoming period with Anadolu Agency (AA).

“Today, the most critical agenda item for the real sector is access to finance and financing costs,” Özdemir said.

“The business community’s main expectation for the upcoming period is the determined continuation of the disinflation process, making financial conditions more predictable and strengthening selective financing mechanisms that support the investment capacity of the real sector,” he noted.

He also said the first half of the year was marked by a period in which uncertainties in the global economy became more permanent, geopolitical risks gained greater importance in economic decision-making processes, and countries searched for new areas of growth.

While noting that economic resilience, supply security, national competitiveness and capacity building in strategic sectors have become among countries’ top priorities in the new period, Özdemir said that the geopolitical developments are now viewed not only “as political risk factors but also as key elements directly affecting economic balances through energy supply security, logistics costs, access to critical raw materials and production costs.”

At the same time, according to Özdemir, the main issue that stood out for the Turkish economy in the first half of the year was the growing visibility of the macroeconomic rebalancing process.

He noted that the disinflation process, the recovery in foreign exchange reserves, improvements in the current account balance and a more balanced outlook in financial markets were among the key indicators closely monitored by investors.

The Turkish disinflation process slowed down temporarily following the outbreak of the U.S.-Israel-Iran conflict at the end of February. However, the annual inflation has dipped more than expected to 32.1% in June, according to official data.

Increasing capacity in advanced tech, competitiveness

Also highlighting the importance of turning existing advantages into lasting competitiveness at a time when global investment competition is intensifying, Özdemir referred to the factors such as digital transformation and high value-added capacity increase.

“Increasing capacity in advanced manufacturing technologies, digital transformation, energy transition and high-value-added sectors is among the key factors that will strengthen Türkiye’s position in the global economy,” he argued.

The MÜSIAD head also said the transformation in global trade offers Türkiye important opportunities not only to maintain its current export performance but also to transition toward a higher value-added production structure.

He stated that the decisive factors for the Turkish economy’s performance will be making macroeconomic gains permanent and advancing the reform agenda within a supportive framework.

He also pointed out that the fundamental conditions for sustainable growth, a stable investment environment and competitiveness are the establishment of a low and predictable inflation environment.

Moreover, he added that the success of the disinflation process is important not only for price stability but also for improving economic actors’ expectations and rebuilding the investment environment.

“A permanent improvement in inflation expectations will contribute over time to making financing conditions more predictable and sustainable,” he noted.

Strengthening selective financing mechanisms

Furthermore, Özdemir said tight financial conditions, including high interest rates and limited credit availability, have increased financing costs for new investments, raised working capital needs and made financial planning more difficult, particularly in investment-intensive sectors.

He noted that the rebalancing process in domestic demand could create pressure on production volumes, capacity utilization rates and profit margins in some sectors.

“The main policy priority should be establishing a balanced framework between the goal of price stability and preserving production capacity,” he said.

Özdemir emphasized that the effectiveness of tight monetary policy should be supported by complementary policies that encourage productive investments, strengthen supply capacity and increase the economy’s long-term growth potential.

“It is important that financing opportunities are directed toward strategic areas that increase economic efficiency and competitiveness rather than general credit expansion,” he suggested.

“Strengthening selective financing mechanisms for export-oriented production, technology investments, digital transformation, green transformation, high-value-added production and productivity-enhancing projects will be critical for the long-term competitiveness of the Turkish economy,” he added.

Predictable policies, structural reforms

Özdemir also underlined that Türkiye’s long-term goal should be creating a balanced economic structure that permanently lowers inflation while preserving production power, export capacity and investment momentum.

He stressed that Türkiye’s goal of becoming a global investment hub should not be viewed merely as an effort to attract more international capital, but rather as a comprehensive economic transformation program aimed at achieving a higher-value position in global value chains.

He also highlighted the importance of strengthening a predictable, competitive and confidence-building investment ecosystem.

“While macroeconomic stability forms the foundation of this ecosystem, strong institutions supported by structural reforms and effectively functioning market mechanisms will be the main factors determining Türkiye’s long-term attractiveness for global capital,” he said.

Additionally, he also noted that global companies are making investment and production decisions based not only on cost optimization but also on long-term resilience, strategic security and operational continuity.

“We believe that if predictable policies are strengthened with a long-term investment perspective and reforms supporting structural transformation, our country’s weight in the global economy will increase further,” Özdemir said.

More balanced economic composition in H2

Özdemir said that while uncertainties in the global economy would continue in the second half of the year, a more balanced period would emerge as predictability improves through the disinflation process, gradual normalization in financial conditions and macroeconomic rebalancing.

He said expectations from economic policymakers include strengthening policies that preserve production capacity, improve export competitiveness and support private-sector investments.

“Developing long-term investment financing, strengthening export financing mechanisms, facilitating SMEs’ access to finance, and increasing financing and incentive opportunities for productive investments are among the critical priorities,” Özdemir said.

“We expect a more balanced economic composition in terms of growth in the second half of the year,” he also said.

“As the business community, our expectation is that the policy framework, which considers the balance between production, investment and exports while permanently establishing price stability, will continue decisively,” he added.

“If macroeconomic stability is permanently strengthened and the reform agenda continues decisively, we believe Türkiye will increase its attractiveness among international investors, achieve a stronger position in global value chains and consolidate its sustainable growth path,” Özdemir concluded.

Iraq has signed 48 deals and partnerships with American companies, many in the oil sector, during the recent visit by newly-elected Prime Minister Ali al-Zaidi to Washington, his office announced on Saturday.

Oil-rich Iraq has been trying to move past decades of war and unrest, but still suffers from poor infrastructure, failing public services, mismanagement and endemic corruption.

It is in urgent need of an economic boost, especially after losing revenue due to a halt in oil exports caused by the Middle East war.

“A total of 48 agreements, memoranda of understanding, cooperation agreements, and partnership declarations were signed between public and private sector entities in Iraq and the United States,” the Iraqi leader’s media office said.

They include “cooperation and partnerships involving the ministries of oil and electricity… with ExxonMobil, KBR, GE Vernova, Shell, and Halliburton,” as well as several deals related to the construction of a major crude oil pipeline between Iraq and Syria.

Iraq also signed a deal with Starlink, which dominates the global satellite communications sector, to introduce services to the country.

On Tuesday, U.S. President Donald Trump praised Zaidi as a “champion” in a meeting at the White House.

Zaidi, a businessman, came to power this year with U.S. blessing after Trump vetoed another candidate.

He has vowed to boost Iraq’s fragile economy and disarm pro-Iran armed groups in Iraq that have targeted U.S. facilities.

Iraq has long walked a tightrope between the competing influences of allies, the U.S. and neighboring Iran.

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