Key facts
- Turkey's economy grew 2.3% year-on-year in the second quarter of 2026.
- This growth rate was below the expected 2.9% and marked a slowdown for the fourth consecutive quarter.
- Agriculture, forestry, and fishing sectors experienced the strongest growth at 13.3%.
- The construction sector contracted by 1.9%.
- Exports fell 3.4% and imports dropped 6.4%, impacting foreign trade.
- Household consumption rose 3.5%, while government consumption decreased by 1.8%.
Turkey's economy expanded 2.3% year-on-year in the second quarter of 2026, official data from the Turkish Statistical Institute showed, falling below the forecast of 2.9%. This marks the fourth consecutive quarter of slowing growth.
On a seasonally and calendar-adjusted basis, gross domestic product (GDP) grew 1.1% from the previous quarter. The strongest growth by activity was observed in agriculture, forestry, and fishing, which expanded by 13.3%, followed by information and communication at 8.6%.
Construction was the only major sector to contract, with a decline of 1.9%. Household final consumption expenditure increased by 3.5% in volume terms, while government consumption fell by 1.8%. Gross fixed capital formation, a measure of investment, grew by 0.6%.
Foreign trade acted as a drag on growth, with exports of goods and services falling 3.4% year-on-year and imports dropping by a sharper 6.4%. This deterioration was attributed to supply chain disruptions and increased shipping and insurance costs stemming from the Iran war.
The Turkish Statistical Institute also revised its full-year GDP growth forecast for 2025 upward to 3.7% from 3.6%, and revised the first quarter year-on-year growth forecast to 2.6% from 2.5%. The government's medium-term program projected 3.8% growth in 2026, with a new program to be announced on September 7.
The Central Bank of the Republic of Türkiye (CBRT) has noted the war's impact on the economy through higher energy costs and uncertainty. Governor Fatih Karahan indicated that while external demand had recovered somewhat, private consumption remained weak, and demand conditions were at disinflationary levels due to tight monetary policy. The CBRT had temporarily suspended one-week repo auctions but resumed them on August 23, moving funding conditions back toward the policy rate of 37%. The bank's next interest rate decision is scheduled for September 10.