Published on Wednesday, October 21, 2026

Türkiye | Growth slows in 3Q26

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Economic activity remains subdued as our monthly GDP indicator nowcasts an annual growth of 2.7% in 3Q26, implying a quarterly growth of around 0.5%. Considering the current weak momentum, ongoing geopolitical risks and the recent shock through funds, we see increasing downside risks to our 2026 GDP growth forecast of 3%.

Key points

Key points:
Available hard data for 3Q26 point to a moderation in economic activity, reflecting weaker industrial production, relatively resilient services output and a recovery in construction activity. September leading indicators provide some positive signals for industry, while suggesting a potential moderation in construction and a broadly flat outlook for services.
Our monthly GDP indicator nowcasts an annual growth of 2.7%, based on 30% available information for 3Q26, implying a quarterly growth of around 0.5% ( vs. 1.1% q/q in 2Q26). The divergence between our overall GDP and non-farm GDP nowcast indicators suggests stronger agricultural output, supported by this year's particularly favorable harvest.
Domestic demand remained subdued in 3Q26, with private consumption likely contracting further q/q amid persistently restrictive financial conditions. Meanwhile, despite still-weak underlying external demand, continued trade reallocation effects amid the prolonged conflict in the Middle East, together with solid tourism revenues, helped moderate the annual contraction in exports, while declining imports kept net exports’ contribution to annual growth positive in 3Q26.
Weak domestic demand and investment activity contributed to a slightly wider negative output gap, supporting disinflation. However, elevated energy prices and inflation expectations, alongside tighter global financial conditions, warrant maintaining a cautious policy stance.
Persistently high energy prices, weaker-than-expected economic activity and the potential impact of the recent shock through funds add to downside risks to our 2026 GDP growth forecast of 3%.