Turkey's Economy Grows 1.1% in Second Quarter of 2026

The Turkish Statistical Institute reported that Turkey's $1.7 trillion economy grew by 1.1% in the second quarter of 2026. This figure exceeded analyst expectations of 1% and marked an acceleration from the 0.3% growth recorded in the first quarter, although annual GDP growth slowed to 2.3%.

Economic activity occurred amid tightening measures designed to mitigate the fallout from the Iran war. Household consumption increased by 3.5% year-over-year, a decline from the 5.1% growth seen in the first quarter. Fatih Karahan, Governor of the Central Bank of the Republic of Türkiye, noted that credit growth and domestic demand cooled during this period.

In response to these conditions, the Central Bank of the Republic of Türkiye shifted funding from an overnight rate of 40% back to a policy rate of 37%, reversing a previous hike intended to buffer against war-related shocks. Market reactions following the data release suggest that a projected interest-rate cut for September may no longer occur.