Analysis
Smart, independent reporting on Turkey's politics, economy and foreign affairs.
Turkey and Egypt conducted their first joint military exercise in the Eastern Mediterranean after a 13-year hiatus, between Sept. 22-26. The two countries also signed an agreement in August on the joint production of unmanned aerial vehicles capable of vertical takeoff and landing.
The postponement of the decision in the lawsuit to cancel the CHP's 38th regular congress brought short-term relief to the markets. The BIST 100 index gained 5% following the decision. The banking index also gained over 6%. The risk premium reached 261 basis points, the lowest in about six months.
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.
Turkey has postponed its moon landing project, which it had aimed to carry out in 2023 to mark the 100th anniversary of the Republic but later delayed to 2026, this time to 2027. The government established the Turkish Space Agency in 2018 to coordinate space activities.
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.
Transportation and Infrastructure Minister Abdulkadir Uraloğlu was fined 9,267 lira for speeding.
The Turkish Statistical Institute (TurkStat) has released for the first time socio-economic status data at the provincial and district levels, based on 2023. Covering more than 26 million households, the study highlights sharp inequalities across Turkey, measuring income, education, and occupation.
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.”
The government’s first pay offer in collective bargaining—10% for the first half of 2026, 6% for the second half, and 4% for each half of 2027—was rejected by public sector unions representing about four million civil servants and more than two million retirees.
Central Bank Governor Fatih Karahan said inflation is expected to stand between 25% and 29% at the end of 2025, and between 13% and 19% in 2026.
After a decision to terminate the 1973 crude oil pipeline agreement with Iraq as of July 27, 2026, Turkey started negotiations with the Iraqi central government for a more comprehensive agreement on the transportation of Iraqi oil. The move is not a withdrawal from the partnership but a strategic reset. Under the 1973 agreement and its supplementary protocols, either party must notify the other at least one year before expiry if it intends to terminate the deal. If no such notice is given, the contract automatically renews for five years. Turkey has now officially informed Iraq of its intent to withdraw, preventing automatic renewal and opening space for renegotiation.
As the world anticipates the outcome of the COP29 summit, which will end this week in Baku, Turkish audiences expect to hear the results of the COP31 bids. Turkey has announced its bid to host the 31st session of the climate summit in 2026. Yet the path to securing the event remains challenging, with its competitor, Australia, currently viewed as the frontrunner. At COP29 in Baku, Turkish officials are making an effort to capitalize on the familiar environment to secure a favorable decision on hosting COP31. While it remains unclear whether the host of COP31 will be decided at this summit, Ankara is actively lobbying for its candidacy, leveraging its proximity to Azerbaijan to strengthen its bid.