Turkey GDP

Economic growth ebbs in the first quarter of 2026

GDP growth decelerates for the third straight quarter: Turkey's annual GDP expanded 2.5% in Q1, following a 3.4% expansion in the prior quarter and continuing a sharp slowdown over the recent quarters. Q1's reading was the weakest since Q2 2024 and undershot market expectations. In seasonally adjusted quarter-on-quarter terms, the economy expanded 0.1% in Q1, following 0.4% growth in the prior quarter.

Weak external demand weighs on economic growth: Compared with the previous period's data, figures in Q1 softened for private consumption (+4.8% on an annual basis vs +5.2% in Q4), fixed investment (+3.0% vs +5.4% in Q4), exports of goods and services (-12.7% vs -2.3% in Q4) and imports of goods and services (-2.0% vs +3.8% in Q4). In contrast, the reading for government consumption improved in Q1 (+2.1% vs -0.9% in Q4). External demand was the main restraint on annual growth, as exports deepened their negative trend, falling 12.7%. This suggests that the lira’s depreciation has been insufficient to compensate for Turkey’s still-high domestic inflation, leaving its exports less competitive abroad.

Panelist insight: On the data and outlook, ING’s Muhammet Mercan said: “The contribution of net exports has shifted further into negative territory, exerting a more pronounced drag on growth. In contrast, domestic demand—despite a clear loss of momentum—has continued to serve as the primary driver of economic activity. Looking ahead, leading indicators for the second quarter […] collectively point to a continued softening in growth dynamics.” EIU analysts added: “We expect growth in exports and tourism to remain subdued, and the administration to maintain its anti-inflationary monetary policies, although it may increase spending to support households and/or troubled sectors. Agriculture will recover from last year's poor harvest, but this will make only a limited contribution to GDP growth. Economic activity could receive a boost if the government loosens policy more rapidly than we expect—for example, ahead of an earlier election—but this is not our central scenario.”

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