Levent Gürses
As the industrial sector continues to bleed and the textile industry in particular faces a severe crisis, more and more major companies are closing their factories in Turkey one by one and relocating to Egypt. Meanwhile, organisations and businesspeople previously known for their support of the government have also begun to voice criticism.
With 3,023 companies closing down in the textile sector so far and 55,000 jobs lost, the crisis is rapidly deepening. It is estimated that job losses in the sector will reach 100,000 by the end of the year.
Speaking at a meeting on textiles and retail, Abdullah Kiğılı, Chairman of the Board of Directors of Kiğılı, said, “The state has abandoned ready-to-wear clothing and textiles.
Things are reaching a point where we will have trouble finding manufacturers. This is the biggest disaster awaiting us. Production will stop in six months. Factories in Anatolia are closing. Production is shifting to Egypt. We need to meet very frequently. A great danger awaits us. If there is no production, how will we replace the goods? I am saying here today that the problems are beginning.‘
Speaking at the same event, Vahap Küçük, Chairman of the Board of Directors of LC Waikiki, said, ’We are going through a difficult period today, but the important thing is to focus on what we can do better in our sphere of influence. You cannot reduce inflation or interest rates, but we need to focus on how we can improve our business and manage costs better.”
MUSIAD (Independent Industrialists and Businessmen’s Association):
The latest report by MUSIAD, a business association whose founding philosophy is to support conservative governments and which has been advancing in this direction for years, and the statements made by its President, Burhan Özdemir, were also interesting.
MUSIAD prepared the report “Escaping the Middle-Income Trap” in collaboration with the International Foundation for Technological, Economic and Social Research, and in his speech at the presentation of the report, President Özdemir stated that Turkey absolutely must implement second-generation reforms.
According to a report in the Dünya newspaper, MUSIAD President Özdemir’s remarks can be summarised as follows:
– In a period when the dollar is being suppressed against inflation, how to interpret high dollar-based income is a matter of debate.
– Our country has become overly dependent on international capital.
– There is growth, but we see that it is not spreading widely to the grassroots.
– There is no coordination between the public and real sector stakeholders.
– Our country is growing, which is a success, but the quality of this growth is highly debatable.
– We will move into the high-income group, but the extent of productivity growth and its quality are subjects of debate. How much of this growth reaches households is important.
– As we enter the league of high-income countries, it is clear that we cannot do so with labour-intensive sectors.
– Labour-intensive sectors such as textiles are moving to Egypt. Fine, let’s move away from textiles, but where will those people be employed?
– We missed out on the monetary expansion after 2008. If we had started implementing the reforms of that period back then, we could have used the resources of that period much more meaningfully as a seriously developed country.
– Excessive idle capacity has been created because companies in similar sectors have made similar investments, leading to excessive foreign currency-based borrowing. Investments have not been directed towards second or third-generation sectors.
– The liquidation of the State Planning Organisation was one of the biggest problems.
– We believe that tax policies are unfair. We are working on a reform proposal.
– High value-added exports: attaching a camera to an imported product makes it value-added for export, but trousers made in Turkey from Turkish yarn and labour do not benefit from incentives.
– Growth will occur even without reforms, but there will be no development. Income will not be spread across the base; this report says so. Income will increase, but the sociological structure will be in disarray. Ghettos will form between those with $20,000 and $3,000 income.
– Opportunities were missed during the period of monetary abundance because Turkey did not pursue a targeted development strategy. We did not implement reforms even though we had the opportunity. In many organised industrial zones, factories were built to receive incentives, but they are empty.
I said this at a meeting with high-level government officials; I believe the real sector is more responsible and to blame. It is said that access to finance has become difficult, and industrialists have nowhere to go, but when money was cheap, did we take it and build new factories? Did we buy new machines? Even if money were cheap, the real sector would make the same mistake again.
Other important news and developments of the week are as follows:
Non-performing commercial loans increased by 108%, SME loans by 134%
CHP Bolu MP Türker Ateş drew attention to the economic collapse by evaluating BDDK data. Over the past year, bad commercial loans increased by 108 per cent and SME loans by 134 per cent. Ateş said, ‘Companies are going bankrupt one by one, Turkey’s production power is eroding. Interest rates are high, and inflation is on the rise again. The government is still preoccupied with window dressing the economy, while the real sector is effectively collapsing.’
Ateş said:
“Over the past year, bad commercial loans have increased by 108 per cent and SME loans by 134 per cent. Companies are going bankrupt one by one, while the government is still preoccupied with window-dressing the economy. Interest rates remain very high, but inflation has started to rise again. Businesses no longer have the strength to survive. Costs are rising, interest rates are climbing, and demand is falling. Neither small traders nor industrialists can service their debts. This picture shows that the real sector in Turkey is effectively collapsing. Every bankrupt business means dozens of people losing their jobs. SMEs are the backbone of the economy; if they go under, production stops and livelihoods disappear.”
Employment in the industrial sector fell by 3.6% in August
According to TurkStat (Turkish Statistical Institute) data, the decline in employment in the industrial sector continued in August. However, overall employment increased by 1.2 per cent annually, thanks to contributions from the construction and service sectors. The total number of salaried employees, which was 15 million 904 thousand in the same month last year, rose to 16 million 89 thousand in August 2025. However, the number of people employed in the industrial sector decreased by 3.6 per cent year-on-year to 4,892,980. In sub-sectors, manufacturing saw a 3.9 per cent decline and mining a 3.3 per cent decline.
Per capita debt exceeded 120,000 lira
Credit debts are now sounding the alarm. Citizens’ debts increased by 48 per cent in one year to 5 trillion 173 billion lira. The average debt per person rose from 84,981 TL to 120,795 TL in the last year.
The cost of living in Istanbul has skyrocketed
The monthly data bulletin, Istanbul Barometer, published by the Istanbul Planning Agency (IPA) affiliated with the Istanbul Metropolitan Municipality, shows that the cost of living for a family of four in the megacity was 71,431 lira in September last year, while this year it was 102,045 lira. Sixty-one per cent of city residents have fallen behind on their electricity bills, and 52.7 per cent on their water bills. Forty per cent of participants were only able to pay the minimum amount on their credit card debt. The proportion of those able to pay the full amount fell from 47.6 per cent to 40.6 per cent in one month. Eleven point three per cent of the low-income group were unable to make any payments.
A current account surplus has been recorded for two consecutive months after 10 years
The current account surplus reached $5.455 billion in August. According to the data, the current account surplus was recorded for two consecutive months. On the other hand, this figure was the highest monthly current account surplus recorded since January 2015. In his assessment, Treasury and Finance Minister Mehmet Şimşek said, ‘In August, we recorded the highest monthly current account surplus in our history, amounting to 5.5 billion dollars.’ Şimşek stated that they predict the gross external financing requirement, which was 23 per cent of national income in June 2023, will decline to approximately 17 per cent in 2025.
Interest expenses will be 2.7 trillion lira in the 2026 budget
Deputy President Cevdet Yılmaz announced in his speech at the 2026 Central Administration Budget Binding Ceremony that the economy is expected to grow by 3.3 per cent in 2025 and 3.8 per cent in 2026. Yılmaz stated that the inflation target for 2026 is 16 per cent and that budget expenditures for the same year are projected to be 18 trillion 929 billion lira, while budget revenues are projected to be 16 trillion 216 billion lira. The budget deficit will be 2 trillion 712 billion TL, with a target deficit-to-GDP ratio of 3.5 per cent. Personnel and social security expenditures are projected to be 5 trillion 507 billion TL, while interest expenditures are expected to be 2 trillion 741.7 billion TL. Yılmaz stated that they project the national income to be 62.2 trillion lira at the end of 2025 and 77 trillion lira at the end of 2026.
18 out of every 100 lira of revenue went to interest
The budget recorded a deficit again in September. After posting a surplus of 96.7 billion TL in August due to an increase in income tax collections, the budget recorded a deficit of 309.6 billion TL last month. Interest expenditures increased by 82 per cent compared to the same period last year, with 18 lira out of every 100 lira of revenue going towards interest payments. Over nine months, 1 trillion 662 billion lira went towards interest payments, while 811 billion lira was allocated to healthcare expenditures.
IMF: Average inflation for 2025 at 34.9%, growth at 3.2%
The International Monetary Fund (IMF) has updated its growth, inflation and dollar forecasts for the Turkish economy. In its latest World Economic Outlook report, the IMF raised its global growth forecast for 2025 from 3% announced in July to 3.2%. It also raised its 2025 growth forecast for the Turkish economy from 3% in July to 3.5%. The IMF raised its growth forecast for the Turkish economy in 2026 from 3.3% to 3.7%.
The report stated that the average inflation forecasts for Turkey are 34.9 per cent for this year and 24.7 per cent for next year, with year-end inflation forecasts at 31.01 per cent for 2025 and 21.02 per cent for 2026. The average inflation forecast for 2027 is 17.97 per cent, while the average inflation forecasts for 2028, 2029 and 2030 are 15 per cent.
New technology’s contribution to sustainable growth wins Nobel Prize in Economics
The 2025 Nobel Prize in Economics was awarded to Dutchman Joel Mokyr, Frenchman Philippe Aghion and Canadian Peter Howitt. According to the announcement by the Royal Swedish Academy of Sciences, Joel Mokyr was deemed worthy of this award for ‘identifying the preconditions for sustainable growth through technological progress,’ while Philippe Aghion and Peter Howitt received the award for their work on ‘the theory of sustainable growth through creative destruction.’
Mokyr, Aghion and Howitt demonstrated how new technology can influence sustainable growth and explained how innovations provide the driving force for further progress. Mokyr used historical sources to identify the reasons behind sustainable economic growth becoming the new normal instead of economic stagnation.
IMF debt warning; post-World War II levels…
The IMF has predicted that global public debt will exceed 100 per cent of gross domestic product (GDP) by 2029, reaching its highest level since 1948, and that the increase will continue. The IMF’s annual Fiscal Monitor report, which analyses fiscal imbalances, stated, ‘This reflects a steeper and higher path than projected before the pandemic.’
Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, said that in a ‘negative but plausible’ scenario, debt levels could rise to 123% of GDP by the end of the decade. This ratio is just below the post-World War II historical record of 132%. Gaspar said, ‘The most worrying scenario would be turmoil in financial markets,’ warning that such a situation could trigger a ‘fiscal-financial vicious cycle’ similar to that experienced by Europe during its sovereign debt crisis in 2010.
Kristalina Georgieva: Focus on trade, the engine of growth
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said she called on countries to maintain trade as the engine of growth. At a press conference held during the IMF-World Bank Annual Meetings, Georgieva recalled that six months ago there was much more concern about the state of the global economy, saying that they had not predicted a recession but a significant slowdown. Georgieva stated that six months on, the global economy was in a state that was ‘better than feared but worse than needed’.
Morgan Stanley raised its year-end inflation forecast to 31.5 per cent
Morgan Stanley updated its year-end forecasts in its report on the Turkish economy, stating that the slowdown in the disinflation process would also lead to a slowdown in interest rate cuts. The institution raised its year-end inflation forecast from 30 per cent to 31.5 per cent.
The following statements regarding inflation were included: “We believe that food supply will return to normal in 2026 and positively impact inflation data in the fourth quarter of 2026. Therefore, we are maintaining our year-end inflation forecast for 2026 at 26 per cent.
The institution revised its October forecast for the Central Bank’s interest rate cut pace from 200 basis points to 150 basis points. It stated, ‘We expect the policy rate to be 37.50 per cent at the end of 2025 and to fall to 26.50 per cent at the end of 2026.’
A family’s daily food cost has risen to 880 lira
According to the results of the September 2025 hunger and poverty line survey conducted by the United Metal Workers’ Union Class Research Centre (BISAM), the monthly expenditure on food alone for a family of four to eat healthily, known as the hunger line, has risen to 26,418 TL. The poverty line, which covers all basic needs, was calculated at 91,381 TL. The monthly expenditure required for a single person to meet their basic needs, such as food, housing, transport and health, has also reached 42,526 TL.
BISAM calculated the average daily cost of healthy nutrition for a family to be 880 TL, with the highest expenditure being 258 TL for fruit and vegetables, 225 TL for milk and dairy products, and 171 TL for meat, poultry and fish…
Gold is rising as if we were on the brink of a financial crisis
Gold prices are breaking record after record. As of 16 October, the December gold futures contract hit $4,272, setting another historic record. Gold is experiencing its biggest rise since the late 1970s. It rose 7.6 per cent weekly, 14.7 per cent monthly and 27.2 per cent in the last three months.
Prices are also breaking records in Turkey’s free market. The price of a gram of gold reached 6,020 lira. The price of a Cumhuriyet gold coin also reached 40,655 lira.
Silver prices are also breaking historical records. The price of an ounce of silver rose by 1.7 per cent to a new historical high of over 53.91 dollars.
Investors, from retail to pension funds, invested 9.3 billion dollars in gold-linked exchange-traded funds last month. However, there is no atmosphere of concern in the market. As gold rose, the S&P 500 peaked on Wednesday. There are no signs of crisis in the bond markets or the US dollar.
According to Yardeni Research analysts, who predict that gold could rise further, prices could reach $10,000 per ounce if the recent rise continues.
JPMorgan CEO Jamie Dimon also stated that it is now ‘semi-rational’ for investors to hold gold, saying, ‘In times like these, the price of gold can easily rise to $5,000 or $10,000.’
Legendary investor Ray Dalio said that gold is safer than the US dollar. He advised investors to allocate up to 15 per cent of their financial portfolios to gold. Morgan Stanley recently recommended a 60/20/20 portfolio allocation with equal weighting between bonds and gold. The bank’s chief investment officer, Mike Wilson, said, ‘Gold is now a non-fragile asset instead of treasury bonds.’
Ken Griffin, head of the largest hedge fund Citadel Securities, said, ‘Many gold buyers think, ‘I now see gold as a safe haven asset, just as the dollar used to be.
Societe Generale said, ’We now expect gold to reach $5,000 by the end of 2026. This is because demand has exceeded our previous forecasts.”
UK-based bank Standard Chartered also reported that it expects the price of gold to reach $4,488 per ounce in 2026. Bank of America (BofA) revised its forecast upwards, stating that gold could reach $5,000 and silver $65 by 2026.
Reserves hit record high due to rise in gold
Total Central Bank reserves reached an all-time high of $189.734 billion in the week of 10 October, partly due to the rise in gold prices. The Central Bank’s gross foreign exchange reserves rose by $309 million to $87.337 billion. Gold reserves rose by $3 billion 208 million to $102 billion 397 million.
‘TCDD debt exceeds 5.8 billion: Carrying the burden of debt’
CHP Kayseri MP Aşkın Genç pointed out that TCDD’s (State Railways of the Republic of Turkey) debt to the Treasury had risen to 5 billion 876 million 761 thousand lira as of 1 September 2025, emphasising that the institution’s financial structure was no longer sustainable.
Genç noted that TCDD has been unable to maintain a balance between income and expenditure in recent times and that the increase in its debt stock poses a serious risk to public finances, stating, ‘TCDD, one of the most established institutions of the Republic, has now become burdened with debt rather than investment.’
Turkcell and Türk Telekom emerged as frontrunners in the 5G auction, securing 3.5 billion dollars
The 5G authorisation auction, which will increase mobile internet speeds by at least 10 times compared to current speeds, concluded with the completion of the sales process for all frequency band packages. In the auction, the total value of the highest bids submitted for 11 packages across 2 frequency bands amounted to $3.534 billion, including VAT.
Within the scope of the Turkcell 5G tender, Turkcell purchased the A1 abstract package for 429 million dollars, the B1 abstract package for 214 million dollars, the B4 abstract package for 187 million dollars, the B5 abstract package for 186 million dollars, and the B6 abstract package for 208 million dollars.
Turkcell CEO Ali Taha Koç stated that his company was the operator with the highest share in the 5G tender, with 160 MHz.
Türk Telekom CEO Ümit Önal said, ‘After the tender, we acquired 1.5 times more frequency than our closest competitor. We have the highest capacity usage rights per subscriber in 5G.’ 5G technology will be available throughout Turkey as of 1 April 2026.
Kacır: Technology exports reached $101 billion
Minister of Industry and Technology Mehmet Fatih Kacır said, “Our medium-high and high-tech exports rose from $10 billion in 2002 to $101 billion last year. This is a tenfold increase,” he said. Kacır stated that approximately 12,000 companies in Turkey’s 113 technology parks are developing new generation technologies, adding that technological superiority is no longer just a driving force for development but a path to global leadership.
Hidden electricity price hike on the horizon
The Energy Market Regulatory Authority’s new regulation, which is set to lower the electricity consumption limit for households, will reduce state support and subject millions of households to free market prices; according to experts, this step amounts to a “hidden price hike”.
Turkey ranks second in the world for counterfeit goods
According to a report by the OECD and the European Union Intellectual Property Office, Turkey has risen to second place in counterfeit goods trade, behind China. One in five counterfeit goods entering Europe originates from Turkey.
Budget crisis in the US remains unresolved
As the US federal government shutdown entered its 15th day on 16 October, the Senate rejected a temporary budget bill proposed by Republicans that would provide funding until 21 November. With both sides blaming each other, it remains unclear when the budget crisis will be resolved.
The government shutdown is having a major impact on the US economy. Public sector employees have not been paid, which is likely to lead to a decline in consumer spending. Meanwhile, the Trump administration has begun federal layoffs during the shutdown, a move that has drawn harsh criticism. Economic data is being released late. There are delays in public offerings.
Treasury Secretary Bessent said the US GDP could be negatively affected by the shutdown. The government shutdown is also likely to strengthen the Fed’s case for further interest rate cuts.
Nestle to lay off 16,000 people
Swiss-based food and beverage company Nestlé plans to lay off 16,000 employees worldwide within two years. Of these employees, 12,000 will be white-collar workers. The remaining 4,000 positions will mainly be in manufacturing and supply chain units.
An era of jobless growth with artificial intelligence…
Goldman Sachs stated, ‘Jobless growth may now be the new normal.’ Goldman Sachs economists reported that the US has entered a period of ‘jobless growth’ because artificial intelligence is increasing productivity while hiring has slowed and young people and recent graduates are struggling to find jobs.
47 million people in Europe cannot adequately heat their homes
According to the State of European Regions and Cities 2025 report, 47 million people in the European Union (EU) cannot adequately heat their homes, while rising energy costs and inequalities in climate policies are deepening social fragility. Energy poverty in the region has risen sharply over the past five years, with energy costs reaching ‘social crisis’ levels, particularly in rural and low-income areas.
Inflation in Germany has risen for two consecutive months
Inflation in Germany rose to 2.4 per cent in September, driven by increases in food and service prices, moving further away from the European Central Bank’s (ECB) target. Annual inflation, which stood at 2.2% in August, reached 2.4% in September. Thus, inflation in Germany has risen for the second consecutive month this year. On a monthly basis, inflation increased by 0.2%.
Other important developments are as follows:
- The share of Currency-Protected Deposits (CPD) in total deposits fell below 1%. CPD decreased by 27.9 billion lira last week to 239.544 billion lira.
- Ayhan Zeytinoğlu, President of the Economic Development Foundation, stated that one of the main issues between Turkey and the EU is the Customs Union, adding that updating the Customs Union would be a ‘win-win’ for both Turkey and the EU.
- During his visit to China, Minister of Agriculture and Forestry İbrahim Yumaklı stated that agreements had been signed to pave the way for trade in agricultural products between the two countries and that Turkish producers would make significant progress in product exports in the near future.
- As the ‘money laundering’ investigation into Can Holding deepens, former Şişecam Board Chairman Ahmet Kırman has also been included in the case. Kırman, who is also an independent board member at Koç Holding, gave a statement as a “suspect” and was released with a ban on leaving the country. Kırman was the architect of the Şişecam-Ciner partnership. Kırman’s removal from Şişecam’s management last year had attracted attention.
- Bank Pozitif, seized by the Savings Deposit Insurance Fund as part of the illegal betting investigation targeting Erkan Kork, will be put up for sale. An auction will be held on 12 November for the bank, which has been operating for 23 years. An estimated price of 1.1 billion lira has been set before the auction.
- TMSF has been appointed as the receiver for The Plaza Bodrum (Paramount Hotel). It was determined that the seven suspects, who were detained as part of the investigation, took advantage of the company’s bankruptcy to incur debt for companies they managed in 2019 and thereafter, and then gave the debt to the complainant company with interest.
- The number of cruise passengers arriving in Turkey reached a 12-year high. The number of passengers arriving in the country on cruise ships exceeded 1.7 million in the first nine months of this year, a 16 per cent increase over the same period last year.
- US banks report super profits. In the third quarter of this year, JPMorganChase posted a 12 per cent increase in net profit, Citigroup 16 per cent, Goldman Sachs 37 per cent and Wells Fargo 9 per cent.