Analysis
Smart, independent reporting on Turkey's politics, economy and foreign affairs.
The financial crisis facing companies in Turkey is deepening as the amount of non-performing loans from banks exceeded 519 billion lira as of the week of Oct. 24. In the January-October period of 2025, the number of companies granted a temporary moratorium on debt repayment rose to 2,326, a 72% increase year on year.
Turkey’s once-mighty dams are losing their power — literally. Electricity generation from the country’s largest hydro plants has fallen by a quarter in the past three decades, a drop experts link to worsening drought and years of poor planning.
With the youth unemployment rate above 25 percent, Labor and Social Security Minister Vedat Işıkhan characterized jobless young people as the “other side” and blamed them for making “excuses” instead of accepting available jobs, stating that they suffer from a “perception disorder.”
U.S. President Donald Trump will host Turkish President Recep Tayyip Erdoğan at the White House on Sept. 25, shortly after both leaders attend the UN General Assembly in New York. Their talks are expected to focus on defense and trade, including Boeing aircraft sales, a major F-16 package, and the potential revival of discussions on the suspended F-35 program.
The Central Bank reduced the calculation margins for credit card cash advances and overdraft account interest rates by 25 basis points.
Vice President Cevdet Yılmaz unveiled the Medium-Term Program for 2026–28, raising the end-2025 inflation target by 11 points from the previous plan. Yılmaz said real GDP growth targets are 3.8% in 2026, 4.3% in 202, and 5.0% in 2028. The inflation path is 28.5% for end-2025, 16% for end-2026, 9% for 2027, and 8% for 2028.
Here at the tail end of the tourist season, the word of the week writes itself: konukseverlik, hospitality, or, in its Ottoman-tinted oldspeak, misafirperverlik. Every guidebook swears Turks are preternaturally welcoming; the national branding machine isn’t shy about it either. Yet while “hospitality” is the country’s trusty calling card, the numbers are more than brochure copy. Turkey received 23.6 million foreign visitors in the first half of 2025, marking an increase of 15.9% year-on-year, as tourism revenues hit a record $24.6 billion. By July, official arrivals had topped 31.2 million, the second-highest January–July tally on record.
In Turkish, teşhirci (exhibitionist) is a word with two lives. In everyday use, it is an insult, hurled at women whose clothes are judged too revealing or at men who flaunt their cars and watches. In the Criminal Code, however, teşhircilik has a very precise meaning: exhibitionism. Article 225 punishes those who “publicly exhibit their sexual organs” with up to six months in prison. A word meant to describe a trench-coat flasher in a public park has, over time, swollen into a moral cudgel: used less to prosecute streakers and more to police women’s bodies.
İsmet Sayhan, the former head of the state-owned Mechanical and Chemical Industry Corporation (MKE) and a close associate of MHP Chair Devlet Bahçeli, was arrested in Ankara. Amid speculation that the detention was a sign of cracks in the ruling alliance, Bahçeli and President Recep Tayyip Erdoğan met in Bitlis’s Ahlat and Malazgirt on Aug. 25–26, posing for cameras to signal the strength of their alliance in their first meeting since July 10. They even listened to folk songs together.
According to the Turkish Statistical Institute’s (TurkStat) Household Labor Force Survey, unemployment increased in the second quarter of 2025 while overall employment declined.
Hakan Aran, head of İş Bank, the country’s largest private lender, said they expect Turkey’s annual inflation to drop to 29% by the end of 2025, with interest rates falling to 35%. Aran shared his predictions regarding the economic normalization process at a press conference. According to Aran, “we may see monthly inflation rates drop below 1% as the normalization process begins in May 2026.”
Foreign direct investment (FDI) in Turkey rose 27% year-on-year to $6.3 billion in the first half of 2025, led by inflows from the Netherlands and Kazakhstan, according to the International Investors Association (YASED).