The Turkish economy grew by 3.6% in 2025, while the disinflation process was maintained. 2026 is set to be a challenging year, with downside risks stemming in particular from the recent Middle East conflict; however, a well-calibrated policy mix could help mitigate these risks.

The global economy remains unstable but is faring better than expected. In Türkiye, we maintain our baseline with somewhat a restrictive policy mix in the short term; yet with a balance of risks evolving to a stickier inflation trend due to the prolonged process with more muted gains on expectations.