ED – this is bne IntelliNews's annual TURKEY OUTLOOK 2026. We are making forward-looking assessments for major Global Emerging Markets in Emerging Europe, Asia, Latin America, Africa and the Middle East, drawing on insightful reporting from our bureaus around the world.

What is on the agenda? What are the prospects for economic growth and what problems lie in store in the coming year? A detailed report that covers, business, economics, finance, energy, politics and the major sectors of the most important markets.

The jailing of Istanbul mayor Ekrem Imamoglu in March 2025 overturned all previous expectations for Turkey, though that’s not so uncommon in Turkish politics. The rate-cutting cycle was disrupted by the subsequent turbulence. Confidence in the financial markets was lost. Political stress became the main theme.

Nevertheless, attractive interest rates sustained carry trade flows and, thanks to the subsequent recovery in the central bank reserves, external debt inflows remained strong, albeit no significant foreign interest in lira papers was observed.

In 2026, currency gains will again not be available, as the smooth nominal devaluation and real lira appreciation policy remains in place.

Thus, foreign interest in lira papers, awaited as in ‘Waiting for Godot’ since the appointment of the “orthodox” economy management officials in June 2023, may also not be observed in 2026, while the carry and debt channels are expected to remain open.

The rate cuts will remain limited. The policy rate was reduced to 38% at end-2025. It stood at 50% at end-2024. For 2025, a decrease of around 10pp is again on the cards. As a result, lira papers will again offer parallel capital returns.

Borsa Istanbul remains a hopeless case, with a lack of foreign interest.

Judicial operations in Turkey, which marked the year throughout 2025, will continue in 2026. No significant reactions are expected.

Domestic politics are kept under control. Society has been subjected to systematic pacification. Imamoglu was posing a challenge to the order of things, but he has been eliminated.

Foreign policy has never posed a challenge to Turkey’s ruling regime. Donald Trump’s dominance has now limited the noise created by US proxies in the region. Nevertheless, there are minor spats and jostling, with controlled clashes and wars of words.

Whether there will be an “Iran War” remains an open question. Is Israel planning a significant move in 2026? It will be watched. Turkey and the Kurds are ready to serve.

Read the full OUTLOOK Turkey 2026 report here.