Turkey’s GDP growth loses momentum in first quarter

Monitoring Turkey: Softening in economic activity

The desk suggests that Turkey's economic landscape is deteriorating, with domestic demand faltering significantly and negative net exports further constraining growth. Per the full note [source], the country's GDP growth is projected to slow to around 3% this year, exacerbated by high borrowing costs and tight monetary policies. Inflation remains troubling, staying close to 30%, which will likely necessitate sustained tight monetary policy. With no major events scheduled in the next month, current market dynamics indicate a focus on these economic signals and their potential impacts on the Turkish Lira.

April sees sharp improvement in Turkey’s current account deficit

The desk interprets April's significant reduction in Turkey’s current account deficit as a pivotal development for the Turkish lira and broader market sentiment. Per the full note from ING, the monthly deficit reached $5.7 billion, indicating a drop in the twelve-month rolling figure from $39.7 billion to $37 billion, equating to about 2.4% of GDP. This shift primarily stemmed from decreased trade deficits, notably a reduction from $9.9 billion to $6.8 billion, driven by lower gold imports despite pressures from rising energy costs related to geopolitical tensions. With recent improvements in capital flows and $12 billion growth in official reserves, the outlook appears more positive for the Turkish economy, influencing the lira's trajectory against major currencies.

Early-year slowdown, but Poland still poised for robust 3.4% growth in 2026

Global banks revise outlook on Turkish economy following central bank’s bold move - Türkiye Today