March 2026

Geopolitical tension between the US and Iran and the ongoing negotiations were the main focus of the markets in February. The tension, which remained high throughout the month, turned into a war affecting almost all Middle Eastern countries at the end of the month. This development increased concerns about global energy supply, while demand for safe investment instruments strengthened. In the coming period, depending on the course of the war, increases in commodity prices, particularly oil and natural gas, pose a significant risk to overall price levels. Amid the uncertainty surrounding the global economic outlook and inflation caused by these developments, the monetary policy decisions of major central banks will be closely monitored.

Turkish economy grew by 3.6% in 2025 according to the chain linked volume index, exceeding the 3.3% level projected in the Medium Term Program. Despite the tight monetary policy stance maintained in 2025, the acceleration in consumption expenditures indicated that domestic demand remained robust, while net exports, which contributed positively to growth in 2024, limited growth by 1.1 percentage points during this period. On the other hand, leading indicators for February signaled that pressures on the manufacturing industry eased somewhat. During the same period, annual consumer inflation accelerated slightly, partly due to the effect of Ramadan. Expectations of an interest rate cut at the CBRT's March meeting weakened amid inflationary risks created by the recent rise in commodity prices. The pace of gold and oil prices in the coming period will be closely monitored in terms of their impact on domestic inflation as well as the current account balance outlook.