February 2026

The first month of 2026 was a period in which the risk of “geoeconomic confrontation”, highlighted as the most significant short-term risk factor in the World Economic Forum’s Global Risks Report, became even more apparent. Throughout January, geopolitical tensions originating in Venezuela, Iran, and Greenland, accompanied by rhetoric regarding trade policies, increased demand for safe haven assets, leading to an upward trend in metal markets that tested historic highs. Global equity markets continued to show a risk appetite, supported by a weak US dollar and ongoing interest in AI-themed stocks. On the other hand, the volatility in financial markets at the end of the month, partly due to the more hawkish perception of the candidate announced by US President Trump for the Fed chair compared to others, highlighted the fragility of markets in the face of policy changes by the US administration.

Data released in January indicated that economic activity in the US was stronger than expected, while maintaining its moderate pace albeit with some acceleration in the Euro Area. Chinese economy maintained its resilient growth performance as well, posting a record trade surplus in 2025 by shifting toward alternative markets despite intense tariff pressure from its largest trading partner, the US, throughout the year. In this environment of high uncertainty regarding global trade and economic policies, the impact of the trade agreement reached between the European Union and India and its impact on Türkiye will be closely monitored in the coming period.

In Türkiye, leading indicators point to continued pressures on industrial production, while demand may be losing momentum but has not yet fallen to desired levels. Fluctuations in global markets, particularly in gold and oil prices, are being closely monitored domestically as well in terms of their impact on the current account deficit, CBRT reserves, and household wealth. These developments are also being closely monitored in terms of the course of inflation, which is the most important issue on the agenda. In January, the rapid increase in food prices, along with updates in labor payments, particularly the minimum wage, and administered/guided prices, led to higher-than-expected monthly inflation. Although the deterioration observed in core goods inflation during this period is considered specific to the first months of the year, curbing the rigidity of expectations and the stickiness of services inflation are important for the future course of inflation. In this context, the first Inflation Report of the year to be announced by the CBRT on February 12 and the messages delivered by the CBRT Governor will be closely monitored in terms of shaping inflation expectations.