ACCORDING to the latest data, Türkiye-an OECD member-ranks as the world’s 17th-largest economy, with a total size of US$ 1.57tn. Turkish economy has recorded uninterrupted growth for 21 consecutive quarters, and with a growth rate of 3.7 percent in the third quarter of 2025, Türkiye ranked fourth among OECD countries in terms of economic growth. The OECD’s latest report projects Türkiye’s growth rate at 3.4 percent in 2026 and 4 percent in 2027, indicating that the country is expected to be the fastest-growing economy among OECD members. As a result of this strong growth performance, per capita income has increased significantly in recent years, reaching US$18,200 by the third quarter of 2025. This development suggests that Türkiye has moved beyond the middle-income trap.

DISINFLATION CONTINUES

The surge in global inflation following the COVID-19 pandemic that began in 2020 also affected the Turkish economy. However, a downward trend has been achieved through the economic program launched in 2023. Consumer inflation, which closed at 65 percent in 2023, declined to 44 percent by the end of 2024 due to effective policy measures. This disinflation process continued throughout 2025, bringing inflation down to 31 percent by year-end. An inflation rate below 20 percent is expected by the end of this year.

CAPITAL INFLOW INCREASE

The success of the economic program has led to increased capital inflows, resulting in a significant rise in the Central Bank’s foreign exchange reserves. As of December 2025, total reserves—including gold—reached a record high of US$ 190bn. A notable increase in gold holdings stands out within total reserves. While gold accounted for 27 percent of total reserves in 2020, this share rose to 59 percent by the end of 2025.

CDS DECLINES

Positive developments such as declining inflation and rising foreign exchange reserves have also been reflected in Türkiye’s Credit Default Swap (CDS) premiums, which indicate a country’s credit risk. After peaking at 900 points in June 2022, Türkiye’s five-year CDS fell sharply to 206 points by the end of 2025. Credit rating agencies have revised Türkiye’s ratings in line with these improvements. Moody’s upgraded Türkiye’s credit rating to Ba3 from B1 in July 2025, while Fitch Ratings affirmed its BB- rating and revised the outlook from negative to stable. The currency-protected deposit scheme, introduced in December 2021 to stabilize the Turkish lira, had placed a heavy burden on the budget. The volume of KKM accounts peaked at US$ 130bn in August 2023. However, as a result of successful economic policies, the size of these deposits declined sharply, falling below US$ 25bn by December 2025.