Levent Gürses
In October, inflation rose by 2.55 per cent, while annual inflation stood at 32.87 per cent, falling well short of targets. Inflation appears to have stubbornly settled in the 33 per cent range for four months now. (July 33.5 per cent, August 32.95 per cent, September 33.29 per cent, October 32.87 per cent)
According to ENAG (Inflation Research Group), annual inflation reached 60%.
Prof. Dr. Hayri Kozanoğlu, in his article titled ‘Inflation is both high and not credible’ in the Birgün newspaper, stated, “These figures are also far outside the results announced by the Istanbul Chamber of Commerce (ITO), which were updated to be in line with Turkish Statistical Institute’s (TurkStat) results. According to the ITO, consumer prices rose by 3.31% monthly in October 2025, while annual inflation reached 40.84%. This discrepancy once again called into question the credibility of the inflation rates announced by the TurkStat.”
According to the Inflation Bulletin prepared by the Research Centre of Confederation of Progressive Trade Unions of Turkey (DISK-AR), based on TurkStat data, average prices have increased 28.6 times and food prices 43.1 times since 2003. DISK-AR emphasised that the 10-month loss in the minimum wage is at least 6,322 lira.
The October inflation rate announced by TurkStat was below market expectations of 2.7-2.8 per cent. While producer inflation continued to slow, the revaluation rate for 2026 was set at 25.49 percent.
Turkey is now the G20 leader in inflation, while Argentina has reduced its inflation rate to 31.8 per cent, despite its numerous problems. Globally, we have the fourth-highest inflation rate; Venezuela has 172 per cent, Iran 45.3 per cent, and Burundi 34.5 per cent.
Hanke: The cause of inflation is a 41% increase in money supply
American economist Steve Hanke attributes the cause of inflation in Turkey to an increase in the money supply. He emphasises that the money supply (M3) has increased by 40.9 per cent annually, which is three times higher than the 12.4 per cent money supply growth rate Turkey has set for itself to achieve an annual inflation rate of 5 per cent. The American economist calls this rate the Hanke Gold Rate.
Steve Hanke, a monetarist, argues that ‘unnecessary and excessive’ money printing fuels inflation and assesses the solution to inflation in countries within the framework of money supply.
Economist Orhan Karaca commented on the deviation from targets, stating, “Around this time last year, the CBRT was aiming to reduce inflation to 14 per cent by 2025. It now appears that the actual figure will be more than double that. It later raised this target to 21 per cent and then to 24 per cent, but those targets will not be met either. Perhaps it is not necessary to set such ambitious targets.”
Clothing was the price increase champion in October. With the arrival of winter, new season products entered the market at increased prices, with men’s clothing rising by 15.2%, women’s clothing by 13.9% and children’s clothing by 13.8%.
Food inflation also remains stubbornly high. It increased by 3.41 per cent in October and fell from 36.06 per cent in September to 34.87 per cent in October. Annual food inflation in the Eurozone is 2.5 per cent and the world average is 3.36 per cent.
Fresh vegetables were among the product groups that increased the most in October, with 13.8 per cent… A striking statistic in this regard is that a kilo of beef, which costs an average of $7 worldwide, is sold for $18 in Turkey…
Another interesting point is that, as economist İnan Mutlu emphasises, while energy prices fell by 14 per cent worldwide in the last year, energy inflation in Turkey reached 35 per cent in the same period.
Other important developments of the week are as follows:
‘Tax burden is not high’ debate
Treasury and Finance Minister Mehmet Şimşek’s statement that ‘Contrary to popular belief, our tax burden is not high compared to international standards’ caused a backlash.
Economist Mustafa Sönmez wrote, “If you exempt 26 per cent of the tax you could collect, if you don’t collect enough tax from companies and banks, if you don’t regulate those earning tons of money as freelancers, then of course the tax burden will appear low. Well, even if you increase taxes, you don’t give it to the public; you take it and transfer it to your allies, that’s another matter…” he wrote.
Furthermore, the tax burden is not distributed fairly. According to Eurostat data, the ratio of indirect taxes to total tax revenues in Turkey is an excessively high 65.9 per cent, while the EU average is 32 per cent and the highest in the bloc are our neighbours Bulgaria at 48.6 per cent and Greece at 41.1 per cent. In Spain it is 30 per cent and in Germany 25 per cent…
Over 2 trillion lira in interest payments in 2026
The Presidency of Strategy and Budget, which reports to President Recep Tayyip Erdoğan, announced in the 2026 Presidential Annual Programme that over two trillion lira in interest payments will be made next year. The report stated, ‘In 2025, interest expenses are expected to exceed the initial allocation of 102.7 billion TL, reaching 2,052.7 billion TL due to the rise in borrowing costs and the increase in financing needs.’
CHP takes action for a true poverty map
Deep poverty in Turkey has reached undeniable proportions. While 20 million people receiving social assistance reveal the extent of poverty,
The Ministry of Family, which cut off data flow to the Family Support Programme, also stopped publishing monthly statistics sharing the number of people in need of social assistance.
The CHP, on the other hand, decided to draw up a ‘poverty map of Turkey’ on the grounds that ‘the Ministry of Family’s censorship of social assistance data has led to the concealment of the true dimensions of poverty in Turkey.’ It was stated that the map would be used ‘to reveal the true picture of poverty and to create a strong foundation for political struggle.’
According to a report by Mustafa Bildircin in Birgün newspaper, it was learned that the CHP’s Poverty Map of Turkey project will scrutinise social assistance activities carried out in 81 provinces and numerous districts. It was reported that, in addition to social assistance provided from the central budget, social assistance provided by CHP-run municipalities will also be examined. It was stated that all studies will be brought together ‘at the national level’ and a ‘comparative poverty map’ will be produced.
Gold rose rapidly, then fell just as quickly
Gold prices rose very quickly and then fell just as rapidly. Gold, which rose to $4,356 on 20 October, closed at $3,978 on 6 October, losing 8.7 per cent in value during this period.
As of Friday, 7 November, spot gold traded at $4,005 per ounce, unchanged on a weekly basis but down 1% on a monthly basis. Gold fell to $3,978 per ounce at Thursday’s close. Gold hit a low of $3,928.66 on 4 November. Gold hit a record high of $4,356.50 per ounce on 20 October, closing at that price, and rose to $4,381.60 on the same day.
Analysts noted that, from a technical perspective, the price of gold per ounce had support at $3,750 and resistance at $4,250.
The main reasons for the decline in gold prices are expectations regarding the US Federal Reserve’s (Fed) interest rate policies and the increase in global risk appetite. In addition, the strengthening of the dollar is partially reducing investors’ shift towards gold as a safe haven.
Fitch optimistic for banks: Profitability to strengthen in 2026
Fitch forecasts that profitability in the Turkish banking sector will gain momentum from 2026 onwards, accompanied by interest rate cuts. Ahmet Emre Kılınç, Director of Fitch Ratings Banks, stated that the direction of monetary policy has begun to yield positive results for the banking sector. Kılınç said that with the introduction of interest rate cuts, they expect a significant improvement in the income structure of banks, adding, ‘Profitability in 2026 will be much stronger compared to this year.’
TÜPRAŞ cuts Russian oil imports, causing fuel shortages at stations
Following the US sanctions against Russian oil companies, Turkiye Petrol Rafinerileri AS (TÜPRAŞ) halted oil purchases from Rosneft. Major distribution companies stopped wholesale sales. Fuel supply issues are being experienced at petrol stations across Turkey.
On 22 October, the US Treasury Department blacklisted Russia’s two major oil companies, Rosneft PJSC and Lukoil PJSC. Before the decision, US President Donald Trump had called on European countries not to purchase oil from Russia on 15 September. According to a report by Medyascope, following the sanctions decision, TÜPRAŞ halted oil purchases from Rosneft PJSC. All distribution companies, including Petrol Ofisi and Opet, took action due to difficulties in fuel supply. The companies suspended wholesale sales to companies other than petrol stations throughout Turkey.
The route of savings is changing: Gold at its peak, conversion to foreign currency
In its new blog post, the Central Bank provided a detailed assessment of the recent trend in foreign currency deposits. The post, titled ‘Recent Developments in Foreign Currency Deposits,’ stated that the liquidation process of currency-protected deposit (KKM) accounts and the sharp rise in gold prices supported the upward trend in foreign currency deposits. However, it was noted that when these effects were excluded, the increase remained quite limited.
It was recalled that the total amount of KKM and foreign currency deposits, which exceeded 340 billion US dollars in August 2023, declined to 221 billion dollars by the end of 2024. The total amount, which has risen again in recent months, has reached 242 billion dollars.
According to the analysis, foreign currency deposits rose by $50 billion, increasing from $188 billion at the end of 2024 to $238 billion. In particular, global gold prices outperforming other investment instruments in the last two months rapidly increased demand for gold. It was reported that, at fixed prices, gold deposits have grown by approximately 76 tonnes and 6.5 billion US dollars since the end of 2024.
THY signs engine agreement with GE Aerospace for Boeing order
Turkish Airlines (THY) announced that it has reached an agreement with US-based GE Aerospace for engines and maintenance services for the aircraft it has ordered from Boeing. The agreement covers a total of 75 aircraft to be delivered between 2029 and 2035.
According to THY’s statement to the Public Disclosure Platform (KAP), the engine tender for a total of 75 Boeing 787-9 and 787-10 aircraft, 50 of which are firm orders and 25 of which are options, to be delivered between 2029 and 2034, has been completed. As a result of the tender, an agreement was reached with GE Aerospace for the aircraft’s wing-mounted engines, spare engines, and engine maintenance services. The agreement is considered an important step in supporting fleet modernisation in line with THY’s growth plans.
Erdemir shares fell after announcing the discovery of gold reserves
Erdemir’s announcement that initial analyses of its gold field in Sivas Kangal had revealed 424,000 ounces of gold failed to have the expected impact on the markets. On 5 November, shares started the day with a drop of nearly 5 per cent at 28.08 TL, and with increased selling, the loss pushed 7 per cent, and the price fell to 27.2 TL. However, the share had gained about 6 per cent in the previous two trading days.
According to data shared on the Public Disclosure Platform, the identified reserve is the result of work carried out on less than 1% of the 58-square-kilometre licence area. Therefore, there is a possibility that the announced amount could be expanded to cover the entire area.
September trade deficit rises to $6.9 billion
According to the Turkish Statistical Institute, under the general trade system, exports increased by 2.8 per cent to $22.576 billion in September, while imports rose by 8.7 per cent to $29.479 billion. As a result, the foreign trade deficit increased by 33.8 per cent compared to the same month last year, reaching $6.903 billion.
The ratio of exports to imports, which was 81 per cent in September last year, fell to 76.6 per cent in the same period this year. In the January-September period, exports increased by 4.1 per cent to $200.578 billion, while imports increased by 5.9 per cent to $267.637 billion. Thus, the foreign trade deficit rose by 11.8 per cent to $67.06 billion in the first nine months of the year.
In September, Germany took the top spot in Turkey’s exports with $1.904 billion. Germany was followed by the United Kingdom, the United States, Iraq and Italy. Exports to these five countries accounted for 30.3 per cent of the total. In terms of imports, China ranked first with 4 billion 264 million dollars. It was followed by Russia, Germany, the United Arab Emirates and the United States.
Preliminary data: Trade deficit rose by 24 per cent in October
Trade Minister Ömer Bolat shared the trade figures for October with the public. According to preliminary data from the ministry, the trade deficit rose by 24 per cent in October compared to the same period last year, reaching $7.4 billion. Thus, the total deficit for the January–October period rose to $74.4 billion. The data shows that Turkey’s exports increased by 2.3 per cent to $24 billion, marking the highest October export figure on record. Bolat stated, ‘We have reached the highest export level.’ Goods imports in October increased by 6.6 per cent to $31.4 billion.
Entrepreneurship report: Health and biotechnology stand out
The ‘2025 First Half Ankara Entrepreneurship Ecosystem Report,’ jointly prepared by StartupCentrum and the Ankara Development Agency, was presented at a special event.
According to data shared in the report, as reported by Forbes Turkey, Ankara continues to be one of Turkey’s most dynamic centres for technology entrepreneurship. With more than 3,000 startups operating across the city, 210 startups have received investments since 2018, reaching a total investment volume of over $331 million.
In the first six months of 2025, 14 investment transactions took place in the city, and startups raised £7.4 million in funding. The median investment amount for the same period was recorded as £240,000.
Although there was a decline in volume compared to last year’s high investment pace, experts consider the first half of 2025 to be a ‘normalisation process’. Health technologies, biotechnology and production technologies stood out in particular, while smaller-scale investments were also recorded in the defence and cyber security sectors. Ankara managed to maintain its position as second in Turkey after Istanbul in terms of investment amount and number of transactions.
The US shutdown crisis deepens: no pay, no services
The budget dispute within the US federal government has turned into the longest shutdown period in the country’s history. With the crisis exceeding 35 days in November, public services have come to a standstill, while approximately 1.4 million government employees have been deprived of their income. Most social support mechanisms have been suspended, and the country’s air transport system faces a serious security risk.
The process began in early September when Congress failed to approve the budget, leading federal agencies to suspend their activities one by one. Many social programmes, including food aid for poor families, were halted. A large number of public employees were either placed on mandatory leave or forced to continue working without pay.
Jamie Dimon: Inflation is not over, risks are returning
JPMorgan Chase CEO Jamie Dimon delivered strong messages about the economy. Dimon, who has managed the bank at the centre of global finance for nearly 20 years, drew attention to the new era by saying, ‘Uncertainty has become the norm.’ According to him, chaos is deepening in every area, from geopolitics to artificial intelligence, public spending to trade policies.
Dimon believes that although the figures paint a positive picture, serious problems are accumulating beneath the surface. Reminding us that consumption is still buoyant, the experienced executive said that this vitality is fuelled by borrowing and warned: ‘We have spent £10 trillion in six years. This is not lasting prosperity; the price will have to be paid when the day comes.’
Berkshire Hathaway’s cash reserves at an all-time high
Berkshire Hathaway, led by Warren Buffett, presented investors with a positive picture in the third quarter. The company’s operating profit rose 34 per cent compared to the same period last year, reaching $13.5 billion. The remarkable performance of insurance operations was a key factor in this increase. The insurance segment’s profit jumped to $2.37 billion, rising by more than 200 per cent.
Berkshire’s coffers also continue to fill rapidly. The company’s cash reserves reached $381.6 billion, breaking all-time records. This amount surpassed the previous peak of $347.7 billion seen at the beginning of the year. Management continues its cautious strategy, believing that attractive investment opportunities in the market remain limited.
IBM to lay off thousands of employees due to AI boom
IBM announced plans to lay off thousands of employees to focus on businesses with higher growth potential in AI consulting and software. The company did not specify how many employees would be affected but emphasised in its statement that the layoffs would impact less than one per cent of its global workforce. The company had 270,000 employees at the end of last year.
IBM has joined Amazon, Meta, Google and other companies that have recently made redundancies as they compete to invest more in the artificial intelligence boom. Many executives predict that technology will help employees with coding and other tasks, leading to further increases in productivity.
Large companies’ layoffs are causing concern for the economy
Economists in the US are concerned that significant layoffs by companies such as Starbucks, Target and Amazon could be a warning sign. The scale and speed of the layoffs show that managers, emboldened by the gains brought by artificial intelligence, are not afraid to lay off workers and that companies are reducing labour costs to protect their profits rather than retaining workers.
China extends olive branch to the US: Additional tariffs suspended for one year
The Chinese government announced that the 24 per cent additional tariff imposed on products imported from the US would be suspended for one year. However, it was stated that the existing 10 per cent tariff would remain in force. It was noteworthy that the decision was taken following talks between Chinese President Xi Jinping and US President Donald Trump last week.
The Chinese Ministry of Commerce confirmed that some sanctions on agricultural products have been eased. This development is seen as an important step signalling a return to positive trade relations between Washington and Beijing, which have been frequently tense in recent years.
Nvidia CEO Huang warns US about artificial intelligence
Jensen Huang, co-founder and CEO of Nvidia, has further clarified his warnings that the US is on the verge of losing its competitive edge in the field of artificial intelligence. Speaking at the Financial Times’ ‘Future of AI Summit’, Huang stated that China is rapidly advancing in the race to develop artificial intelligence, saying, ‘China will win this race.’
According to Huang, increasing regulatory pressure in Western countries is hindering technological development. Emphasising that new regulatory measures targeting artificial intelligence are increasingly being implemented in US states, Huang expressed concern that innovation could slow down due to excessive oversight.
Global bond issuance hits record high
Governments around the world are turning to debt instruments to cover growing budget deficits, while companies are doing the same to fund artificial intelligence projects. This intense demand has pushed bond issuance to a historic peak this year.
According to data compiled by Bloomberg, global bond sales showed strong momentum throughout 2025, exceeding $5.94 trillion as of Wednesday, reaching an all-time high. This surpassed the record set in 2024.
While governments accounted for the bulk of the issuance, moves by tech giants also contributed to the surge. Alphabet and Meta entering the market with massive bond packages to finance their artificial intelligence investments fuelled the rapid rise in figures.
US prepares for £125 billion bond issue
Meanwhile, the US will issue £125 billion in bonds, with no increase expected in long-term borrowing The US Treasury Department announced that it will issue a total of £125 billion in bonds with maturities of 3, 10 and 30 years. However, the department stated that it does not anticipate an increase in bond and note sales until the middle of next year and will place greater emphasis on short-term borrowing instruments (bills) to finance the budget deficit.
Some key data points are as follows:
- The Istanbul Chamber of Industry (ICI) Turkey Manufacturing Purchasing Managers’ Index remained in contraction territory. The index fell by 0.2 points in October to 46.5.
- The US ISM services sector index rose by 2.4 points month-on-month in October to 52.4.
- In the Eurozone, the PPI fell by 0.1% month-on-month in September, with an annual decline of 0.2%.
- Factory orders in Germany increased by 1.1% month-on-month in September. They had fallen by 0.4% month-on-month in August, while the expectation was for a 0.9% increase.
- According to the US ADP Private Sector Employment Report for October, private sector employment increased by 42,000 in October, exceeding expectations of a 30,000 monthly increase.