Levent Gürses
As inflation erodes purchasing power, impoverishment is accelerating. Families have begun selling their assets, taking on debt through credit cards and consumer loans, and migrating from cities to make ends meet. Meanwhile, companies struggling due to economic policies have accelerated layoffs as their first course of action. As unemployment rises, the extent of poverty became apparent last week during the parliamentary debate on the budget of the Ministry of Family, Labour and Social Services.
On the other hand, the biggest cause of this poverty is the failure to control inflation. The Central Bank, which constantly revises its forecasts, raised its inflation forecast for the end of 2025 to 32 per cent in its latest report. However, it projected a halving of this rate to 16 per cent by 2026.
Regarding this rather unconvincing forecast, credit rating agency Standard & Poor’s stated that fiscal policy must be tightened and spending controlled to halve inflation.
The week’s key developments are as follows:
11.8 million people live in extreme poverty, and election preparations are in the social assistance budget
The 2026 budget of the Ministry of Family and Social Services, discussed in the Parliament’s Planning and Budget Committee, revealed that 11.8 million citizens live in extreme poverty. The social assistance budget for 2026 was proposed at 284 billion 470 million TL, a 29.5 per cent increase compared to 2025, while the budget for 2027 was proposed at 644 billion 347 million TL, a 126.5 per cent increase compared to 2026. The high rate of increase projected for 2027 was interpreted as ‘election preparation’.
According to a report in Birgün newspaper, the size of the budget allocated by the Ministry for ‘Combating Poverty and Social Assistance’ for 2026 highlighted the validity of the criticism that ‘the AKP is covering up poverty with the budget’. CHP MP Tahsin Ocaklı said, ‘You want the poor to be helped, but we want poverty to be eliminated.’
The Ministry’s budget over the years is as follows: 2023: 91 billion 582 million TL, 2024: 205 billion 861 million TL, 2025: 219 billion 723 million TL, 2026: 284 billion 470 million TL.
Some striking figures from the Ministry’s reports for the first half of 2025 are as follows: Number of uninhabitable homes: 11,000; Number of people living in extreme poverty: 11.8 million; Number of people in debt to the Social Security Institution: 8,217,937; Number of people receiving electricity consumption support: 3,461,452.
The Central Bank has raised its 2025 inflation forecast to 32%, and 16% for 2026.
The inflation forecast for the end of 2025 has been raised from the 25-29 per cent range to the 31-33 per cent range. Central Bank Governor Fatih Karahan shared the fourth and final Inflation Report of the year with the public.
According to Karahan’s presentation, the 2026 CPI interim target was kept at 16 per cent, with the forecast range set at 13-19 per cent, as in the previous report. The decision not to change the 2026 inflation interim target and forecast range increased expectations that wage increases at the beginning of the year would be determined within this framework.
TCMB President Karahan announced that they expect inflation to be in the range of 31-33 per cent at the end of 2025, with a 70 per cent probability. Thus, the year-end inflation forecast was 32 per cent. The previous forecast was 27 per cent. In the previous report published on 14 August, the forecast range for the end of 2025 was announced as 25-29 per cent.
CHP Group Deputy Chairman Ali Mahir Başarır reacted to TCMB Governor Fatih Karahan’s final inflation report of the year, drawing attention to the inconsistency in the Central Bank’s forecasts. Başarır said, ‘The Central Bank, which cannot see three months ahead, is forecasting 16 per cent inflation in 2026. Who would believe that?’
The Central Bank’s inflation forecasts have changed as follows:
February 2024: 14%, May: 14%, August: 14%, November: 21%.
February 2025: 24%, May: 24%, August: 27%, November: 32%.
S&P: Fiscal policy must be tightened to halve inflation
Frank Gill, Senior Director at S&P Global Ratings, stated that interest rate hikes alone would not be sufficient to control inflation, emphasising that monetary policy must be supported by fiscal policy and structural measures. ‘There are some constraints on the expenditure side, but fiscal policy may need to be tightened further to halve inflation next year from its current level,’ he said.
Gill noted that bringing inflation down to single digits will play a decisive role in Turkey’s long-term credit rating returning to investment grade. He pointed out that it is particularly difficult to reduce core inflation due to strong demand for gold and foreign currency among Turkish households, and consumption being higher than desired levels. Emphasising that the drought during the summer season also had a negative impact on food prices, Gill said, “On our side, Turkey’s current long-term credit rating is BB- with a stable outlook. We believe this level is reasonable at the moment.
Gill said that so far, the risks to core inflation persistence and food inflation have been fairly well contained, but the risks remain. ‘The Central Bank’s inflation target for the end of 2026 is 16 per cent. Our average inflation forecast for next year is around 20 per cent,’ he said.
Housing sales accelerate as interest rates fall
As interest rates entered a downward trend, housing sales, which are predominantly driven by investment purchases, also accelerated. Nationwide housing sales reached 164,306 in October, marking the highest monthly sales figure this year. Looking at October figures, this was the second-highest sales figure after 2024. However, there was a 0.5 per cent decrease compared to last year’s record.
Mortgage-backed home sales in the January-October period this year increased by 64.0 per cent compared to the same period last year, reaching 186,020. Mortgage-backed home sales in October increased by 11.5 per cent compared to the same month last year, reaching 23,527. In October, the share of first-time home sales in total home sales was 33.4 per cent. The provinces with the highest home sales were Istanbul, Ankara and Izmir, while the cities with the lowest sales were Ardahan, Bayburt and Dersim.
Fastest decline in industrial production in 5 months
Turkey’s industrial production declined by 2.2 per cent month-on-month in September, recording the fastest decline in the last 5 months. Industrial production increased by 2.9 per cent year-on-year. The September data show that the Turkish economy entered the last quarter of the year with weak production momentum.
Assessing the largest decline in industrial production since April, Prof. Dr. Şenol Babuşçu said, ‘Monthly fluctuating and directionless production is the clearest reflection of the uncertainty in the economy.’
Among the sub-sectors of industry, the largest decline was in the manufacturing industry. The manufacturing industry index decreased by 2.3% on a monthly basis, while it increased by 2.7% on an annual basis.
The cost of living has doubled; 104,000 TL for living in Istanbul, 27,000 TL for food
The results of the “Cost of Living in Istanbul Survey” published monthly by the Istanbul Planning Agency (IPA) for October 2025 have been announced. The cost of living in Istanbul increased by 42.30 per cent annually and 2.82 per cent monthly in October.
Thus, the average cost of living for a family of four in Istanbul reached 104,927 lira. In September, the average cost of living in Istanbul exceeded 100,000 lira for the first time, increasing by 2,882 lira to 102,045 lira. The cost of living has increased by 22,047 lira since January, which is almost equivalent to one minimum wage.
Meanwhile, according to DİSK United Metal Workers BİSAM, the monthly expenditure required to feed a family of four was 26,925 lira in October 2025. This expenditure is only the minimum amount required for food. According to BİSAM, the poverty line reached 93,135 lira.
Gold climbs back to the top; an ounce of gold back at $4,200 level
Gold prices are rising again. As of Friday morning, 14 November, the spot price of gold in London rose to $4,189, gaining 4.76 per cent in value over the past week. Gold started the week at the $4,000 level. The price of silver rose to $52.98 per ounce, a weekly increase of 9.34%.
As of 13 November, the price of gold per gram started the day on an upward trend, trading at 5,720 Turkish Lira. Quarter gold coins are selling for 9,693 Turkish Lira, while republic gold coins are selling for 38,622 Turkish Lira.
Experts note that the US government reopening and expectations of Fed interest rate cuts have supported the rise. The US government reopening is expected to restart the flow of economic data, and expectations that the US Federal Reserve (Fed) will continue interest rate cuts have extended the rise to five days.
The recent decline in prices is described as a ‘steam release’ rather than a trend reversal. Ole Hansen, Head of Commodity Strategy at Saxo Bank, states that expectations of interest rate cuts, geopolitical risks and central bank purchases will continue to support gold in the long term.
Zurich-based Swiss bank UBS also views the recent decline as a ‘temporary pause’ and forecasts that gold prices have the potential to rise to $4,700 per ounce.
Current account surplus of $1.1 billion monthly, annual deficit of $20 billion
Turkey’s current account balance recorded a surplus of $1.112 billion in September. The current account surplus was $1.738 billion in July and $5.418 billion in August. The current account maintained its positive trend for the third consecutive month.
According to annualised data, the current account deficit was approximately $20.1 billion in September, while the balance of payments-defined trade balance, recorded a deficit of $64.8 billion. During the same period, the services balance recorded a surplus of $62.6 billion, while the primary and secondary income balances recorded deficits of $17.6 billion and $308 million, respectively.
Economist Haluk Bürümcekçi noted that the current account deficit stood at $41.5 billion in 2023, falling to $10.5 billion in 2024, stating, “As financial conditions tighten, global uncertainties and volatility in energy costs subside, we are maintaining our year-end current account deficit forecast at 22 billion dollars.”
Budget deficit in October: 196 billion TL, annual deficit 59 billion dollars
The Treasury cash balance recorded a deficit of approximately 196 billion TL in October. According to data from the Ministry of Treasury and Finance, the Treasury’s cash revenues last month were 1 trillion 138 billion 210 million lira, while cash expenditures were 1 trillion 334 billion 89 million lira.
Non-interest expenditures amounted to 1 trillion 174 billion 234 million lira, while interest payments amounted to 159 billion 855 million lira. The non-interest balance recorded a deficit of 36 billion 25 million lira.
According to economist İbrahim Kahveci’s calculations, the 12-month budget figures in US dollars as of October are as follows:
Revenues: $316 billion, Non-interest expenditures: $325.8 billion, Interest expenditures: $49.1 billion, Cash deficit: $58.9 billion.
30 billion TL mega tender goes to AKP MP
The Ministry of Transport’s 30 billion TL mega metro tender was awarded without a public tender to AKP MP Ferhat Nasıroğlu, Erdoğan’s friend Hasan Gürsoy, and Tahir Çelik’s company, which had not installed filters in its thermal power plant.
According to Birgün’s report, the tender was awarded to the joint venture of Çelikler Taahhüt İnşaat-Fernas İnşaat-Güryapı Restorasyon for a value of 30 billion 51 million TL. The massive tender was conducted through the negotiated procedure stipulated in the controversial Article 21/B of the Public Procurement Law, which is to be used in emergencies such as ‘sudden and unexpected events such as natural disasters, epidemics, or threats to life or property.’ This tender provision has been criticised for years for being used as a ‘method of awarding the tender to whomever one wishes.’ It is known that Ferhat Nasıroğlu, owner of Fernas İnşaat, which won the £30 billion tender, is an AKP Batman MP, and that Hasan Gürsoy, owner of Güryapı Restorasyon Şirketi, is a friend of AKP President Recep Tayyip Erdoğan, both of whom have previously won large tenders from the public sector.
Four out of ten young workers are unregistered
In Turkey, 1.665 million young people aged 15-19 are employed. Forty per cent of child and youth workers are employed informally. However, the deaths of three young women under the age of 18, who were converted into informal, unprotected, cheap labour in a fire at the Ravive Kozmetik perfume filling plant in the Dilovası district of Kocaeli, became a mirror image of child labour in Turkey.
TÜİK’s household labour force statistics reveal the position of young people aged 15-19 in the labour force. According to TÜİK’s labour force statistics for the second quarter of the year, 1,665,000 young people aged 15-19 are employed, while 281,000 are seeking work. Of these young people, 674,000 are employed informally. While the informal employment rate within total employment is 25.9 per cent, it was determined that 40 per cent of young people aged 15-19 in employment are working informally.
Considering that informal employment stands at around 8,464,000, 8 out of every 100 informally employed individuals are in the 15-19 age group.
The impact of the new tax burden will force 300,000 businesses to close
Bendevi Palandöken, President of the Confederation of Turkish Tradesmen and Craftsmen (TESK), stated that tradesmen were caught unprepared for the transition from the simplified tax regime to the actual tax regime. Palandöken said, ‘Between 250,000 and 300,000 businesses will be forced to close.’
Palandöken emphasised that tradespeople were not given sufficient time to adapt to the new tax system, noting, ‘On the one hand, accounting fees, on the other hand, e-seizures and changes in tax legislation have left tradespeople unable to do business.’
Reminding that there is only one month left before the implementation comes into effect, Palandöken said, ‘The Treasury and Finance Ministry could have at least allowed for measures to be taken one year in advance. Small business owners would have been able to prepare during this period.’
Koç Holding defied inflation: 9-month net profit of 14.4 billion TL
According to the financial results published by Koç Holding, the holding company earned a net profit of 7.6 billion TL in the third quarter of the year. The holding company’s total net profit for the first nine months of the year was 14.4 billion.
Koç Holding shared its financial results for the first nine months of 2025. Having recorded a loss of 3.6 billion TL in the same period last year, the holding posted a profit of 14.4 billion TL this year. Koç Holding announced a net profit of 7.6 billion TL in the third quarter. The holding had reported a net loss of 4.4 billion TL in the same period last year.
In the first nine months of 2025, the holding’s consolidated sales revenues decreased by 11.69 per cent year-on-year to 1.95 trillion TL. The gross profit margin increased by 2.42 points to 14.49 per cent, while the EBITDA margin increased by 1.72 points to 6.12 per cent.
Looking at the contribution of business segments to consolidated net profit, the energy segment accounted for approximately 67 per cent of total profit, amounting to 9.7 billion TL, thanks to Tüpraş’s strong refining margins and operational efficiency. The automotive segment generated a consolidated net profit of 11 billion TL, supported by high production volumes and exports from Ford Otosan and Tofaş. The durable goods segment recorded a loss of 3.3 billion TL due to weak demand in the European market for Arçelik and accounting adjustments at Whirlpool. In the finance segment, Yapı Kredi recorded a loss of 711 million TL due to one-off accounting effects. The other affiliates group also dragged down the total with a loss of 2.4 billion TL.
Gold yielded the highest returns in October, while the stock market lagged behind
TÜİK published its report on the Real Return Rates of Financial Investment Instruments for October. According to the data in the report, the highest increase in October was in gold bullion, with rates of 13.63 per cent when adjusted for the domestic producer price index (Yİ-ÜFE) and 12.61 per cent when adjusted for the consumer price index (TÜFE).
Gold was followed by deposit interest rates and domestic debt securities. The dollar and euro were the losing investment instruments in October.
The report states, “When adjusted for Yİ-ÜFE, deposit interest (gross) provided investors with a real return of 1.50 per cent and Government Domestic Debt Securities (DİBS) provided a real return of 0.79 per cent. The US dollar lost 0.41%, the euro lost 1.23%, and the BIST 100 index lost 3.96% for investors. When adjusted for CPI, deposit interest (gross) provided investors with a real return of 0.59%, while DİBS lost 0.12%, the US dollar lost 1.31%, the Euro lost 2.12%, and the BIST 100 index lost 4.82% for investors.
Investor preferences are changing: 324,000 investors exited the stock market in 10 months
In the first 10 months of the year, 324,000 investors exited the stock market. Investors seeking safe havens turned primarily to investment funds and government bonds. While the number of investors in the stock market continued to decline, the increase in the fund and bond markets was noteworthy.
According to CSD data, the number of investors with share balances fell to 6.5 million as of October. This represents a decline of approximately 4.75 per cent compared to the beginning of the year. The number of investors, which stood at 6.824 million in January, fell to 6.277 million by the end of October. The continuous downward trend from April to September showed a partial recovery in October.
Economist Prof. Dr. Şenol Babuşçu assessed the situation, stating, ‘Weak confidence and risk aversion are strengthening the shift towards safer instruments.’
US sanctions 7 Turkish companies
The US has imposed sanctions on 32 individuals and entities, 7 of which are based in Turkey, on the grounds that they are part of Iran’s ballistic missile and unmanned aerial vehicle supply chain.
According to a statement issued yesterday evening by the US Treasury Department, the sanctions list includes 32 individuals and companies operating in Iran, Turkey, the United Arab Emirates, China, Hong Kong, India, Germany and Ukraine. It was stated that these individuals and companies are part of the supply chains that enable Iran’s missile and unmanned aerial vehicle (UAV) programmes to continue.
The statement indicated that Hong Kong-based companies Qian Xi Long and Hin Yun are part of the supply network of Mado, an organisation that manufactures engines used in Iran’s Shahed-131 and Shahed-136 UAVs. It was stated that the two Hong Kong-based companies received payments amounting to hundreds of thousands of dollars from the Turkish-based companies Arkedya Gıda, Intro Oto Yedek Parça, Own Uçar Gıda, Royal Yapı İnşaat, Loris Turizm, Özkam Nakliyat and Artaş Gümrükleme, and these companies were added to the sanctions list.
The US government has reopened, but normalisation will take time
The 43-day US government shutdown has ended; the normalisation process could take weeks. Federal employees are receiving their salaries, but new cuts to healthcare and social assistance are on the agenda. The longest shutdown in the country’s history ended on 12 November.
During the shutdown, there were serious disruptions in many areas, from social assistance to air traffic, employee salaries to the closure of museums and parks. Although federal agencies are back in operation, it will take time for the lives of millions of Americans to return to normal.
Since 1 October, hundreds of thousands of federal employees have either been furloughed or continued to work without pay. Most had to cut back on spending, from home repairs to their children’s activities. Some took out emergency loans to cover basic needs such as rent and food.
With the new budget agreement, employees will begin receiving their regular salaries and retroactively collect wages unpaid during the shutdown. Furthermore, the reversal of personnel cuts made during the shutdown has been guaranteed by law.
Inflation in the US has risen back to 3%, but remains under control
Consumer prices in the US rose by 0.3% in September, pushing the annual inflation rate up from 2.9% to 3%. This is the highest level since January.
While there is speculation about how the return of inflation to 3% will affect the Federal Reserve’s (FED) policy interest rate cuts, it is being interpreted that ‘this rate is higher than normal, but not out of control.’
The rise in petrol prices, along with increases seen in areas such as food, housing, electricity and goods subject to customs duties, was expected to contribute to last month’s inflation increase.
Economists had anticipated that inflation would continue to accelerate, rising by 0.4 per cent month-on-month and 3.1 per cent year-on-year.
The US raises its oil price forecast
The US Energy Information Administration (EIA) has revised its average oil price forecast upwards for this year and next year, taking into account developments in global oil markets.
According to the EIA’s ‘November 2025 Short-Term Energy Outlook Report,’ the average price per barrel of Brent crude oil is expected to be $68.76 this year. The price was previously estimated at $68.64 in the previous report.
The average price per barrel of West Texas Intermediate (WTI) crude oil is expected to be $65.15. Last month’s price estimate for WTI was $65.
The EIA forecasts the average price per barrel for next year to be $54.92 for Brent crude and $51.26 for WTI. In the previous report, the average barrel price of Brent crude oil was forecast to be $52.16, while the barrel price of WTI crude oil was forecast to be $48.50.
The upward revision in prices was influenced by China’s high-volume purchases to increase its strategic oil reserves and the possibility that new sanctions against Russia could limit production.
China takes a step back to please Trump
The Beijing administration announced that, in line with the agreement reached between US President Donald Trump and Chinese President Xi Jinping during their meeting in Busan, South Korea, on 30 October, it would postpone the measures it had taken to control the export of rare earth elements for one year, starting from 10 November.
According to a statement from China’s Ministry of Commerce, the restrictions on the export of certain raw and finished materials deemed sensitive to national security, announced on 9 October, have been postponed until 10 November 2026. The restrictions focused on rare earth elements and related production technologies.
Other important developments of the week are as follows:
- TÜİK announced the turnover indices for September 2025. The turnover index for the manufacturing, construction, trade and services sectors combined increased by 37.5 per cent compared to the same month last year and by 4.6 per cent compared to the previous month.
- TÜİK announced the trade sales volume index data for September 2025. Trade sales volume recorded an annual increase of 10.3 per cent and a monthly increase of 4.7 per cent in September.
- An analysis published in the Evrensel newspaper emphasised that more than 500 billion of the 700 billion in profits earned by banks in nine months came from consumer loan interest. Despite such high profits from consumer loans, personal loans account for only 39 per cent of the total loans granted by banks. Greg Guyett, First Vice President of the European Bank for Reconstruction and Development, said that their investments in Turkey reached €2.2 billion in 2025.
- Guyett said, ‘Investments were made in 42 different projects in the areas of corporate, small and medium-sized enterprises, partnerships with financial institutions, energy, infrastructure and innovation.’
- Industrial production in the Eurozone rose by 0.2 per cent in September compared to the previous month, falling short of market expectations. Industrial production rose by 1.2 per cent in September compared to the same month last year.
- Chinese stock indices are rising, led by the technology and automotive sectors. The Shanghai Composite Index reached 4,029.5 points on Thursday, 13 November, its highest level since 2015. The government is expected to announce a comprehensive plan to support the battery sector.
- The International Grains Council forecasts that global grain production will reach an all-time high of 2.425 billion tonnes, the sharpest increase in the last 10 years.
- According to a Rabobank report, coffee and cocoa prices are expected to decline in 2026 as bumper harvests increase global supply. Arabica coffee prices, which reached record levels this year, are expected to stabilise in the $2.50–3.50 range in 2026.
- The labour market in the UK is sounding the alarm. The unemployment rate rose to 5 per cent in the July-September period, reaching its highest level since the pandemic period in 2021. This rate was 4.8 per cent in the previous three months. The number of salaried employees also fell to 30.3 million in total.