Outlook of the Turkish Economy in Light of September Economic Data
Leading economic indicators for September show that weakness in production and consumption continues, inflation expectations remain entrenched, and external deficit risks are increasing.
In line with the released leading economic indicators for September, weak production, slowing consumption, entrenched inflation, and external deficit concerns come to the forefront in the Turkish economy.
Production and PMI Data
The ISO – S&P Global manufacturing PMI index continued to stay below the 50 threshold for contraction and expansion, averaging 47.9 in the third quarter.
While the decline in international demand and new orders continues, according to the MUSIAD SAMEKS index, industrial production is contracting, but the services sector exhibits weak expansion.
Employment and Unemployment Status
According to the August employment data, the headline unemployment rate is at its lowest level in recent years.
On the other hand, the broad-based unemployment rate continues to hover above 30 percent, reflecting the fragility in the labor market.
Consumption and Domestic Demand
While the BloombergHT consumer tendency index decreased by 11.95 percent down to 67.40, consumer loans have also shown a slowing trend for the past three months.
The automobile and light commercial vehicle market contracted by 13.39 percent in the first nine months of 2026 compared to the same period of last year, dropping to 803,465 units.
Inflation and Expectations
While ITO CPI recorded a monthly increase of 2.11 percent and the annual rate fell to the 33.5 level, supply-demand imbalances remain insufficient to bring inflation down.
According to CBRT sectoral surveys, households' 12-month-ahead inflation expectation stands at 45 percent, while the business world's expectation is at 32 percent.
Foreign Trade and Current Account Deficit
Although an improvement is observed in the core balance—an indicator of domestic demand—it is noteworthy that the headline external deficit carries a tendency to expand.
If food and fuel prices remain high during the winter months, the current account deficit could pose a risk for 2027 and pressure CBRT reserves.