Turkey’s Latest GDP Growth Rate QoQ: A Data-Driven Macro Analysis
Key Takeaways: Turkey’s GDP growth rate for Q4 2025 came in at 1.10%, beating the 0.80% estimate but below the previous 1.60%. This marks a moderate slowdown from recent peaks but remains above the 12-month average of 0.70%. Monetary tightening, fiscal adjustments, and external pressures shape the outlook. Risks include geopolitical tensions and currency volatility, while structural reforms and export resilience offer upside potential.
Table of Contents
Turkey’s latest GDP growth rate for Q4 2025, released on December 1, 2025, shows a quarter-on-quarter expansion of 1.10%. This figure surpasses market expectations of 0.80% but represents a deceleration from the 1.60% growth recorded in Q3 2025. Over the past year, Turkey’s GDP growth has fluctuated between contraction and robust expansion, reflecting a volatile macroeconomic environment.
Geographic & Temporal Scope
The data covers Turkey’s entire economy for Q4 2025, with comparisons drawn against the previous quarter and the trailing 12-month average. The Sigmanomics database provides a comprehensive, high-frequency update, ensuring timely and accurate insights.
Core Macroeconomic Indicators
Alongside GDP growth, inflation remains elevated at around 35% YoY, while unemployment hovers near 10%. The Turkish lira (TRY) has depreciated roughly 15% against the USD over the past year, impacting import costs and inflationary pressures.
Turkey’s GDP growth of 1.10% QoQ in Q4 2025 contrasts with a contraction of -0.20% in Q3 2024 and a peak of 2.40% in Q2 2024. The 12-month average growth rate stands at approximately 0.70%, indicating moderate economic momentum.
Monetary Policy & Financial Conditions
The Central Bank of the Republic of Turkey (CBRT) has maintained a tight monetary stance, with the policy rate at 25%, aiming to curb inflation. Despite this, real interest rates remain negative due to high inflation, complicating financial conditions. Credit growth slowed to 5% YoY, reflecting cautious lending.
Fiscal Policy & Government Budget
Fiscal policy remains moderately expansionary, with a budget deficit forecasted at 3.50% of GDP for 2025. Increased public investment in infrastructure and social programs supports growth but raises concerns about debt sustainability, with public debt at 40% of GDP.
External Shocks & Geopolitical Risks
Turkey faces ongoing geopolitical tensions in the Eastern Mediterranean and Syria, which weigh on investor confidence. Additionally, global commodity price volatility and supply chain disruptions pose risks to inflation and growth.
Drivers this month
- Domestic consumption contributed 0.50 percentage points (pp), supported by wage growth and credit availability.
- Net exports added 0.30 pp, buoyed by a weaker TRY improving export competitiveness.
- Investment growth slowed, subtracting -0.20 pp amid higher borrowing costs.
- Government spending added 0.20 pp, reflecting ongoing infrastructure projects.
Policy pulse
The 1.10% growth rate sits below the CBRT’s target range of 2–3% QoQ needed to sustainably reduce inflation. The central bank’s hawkish stance is justified but risks further slowing growth if maintained too long.
Market lens
Immediate reaction: The Turkish lira (TRY) strengthened 0.40% against the USD within the first hour post-release, while the BIST 100 index rose 0.70%, reflecting relief at the better-than-expected growth figure. Short-term yields on 2-year government bonds declined by 10 basis points, signaling reduced risk premia.
This chart reveals Turkey’s GDP growth is trending upward after a brief dip in late 2024. The economy shows resilience despite monetary tightening and external pressures, but growth remains below pre-pandemic peaks. Investors should watch for sustained momentum or renewed volatility.
Looking ahead, Turkey’s growth trajectory depends on several key factors. The baseline scenario projects steady 1.00–1.30% QoQ growth in 2026, supported by stable inflation and moderate fiscal stimulus. This scenario carries a 50% probability.
Bullish scenario (30% probability)
- Accelerated structural reforms boost productivity and investment.
- Geopolitical tensions ease, improving investor confidence.
- Export demand rises amid global recovery.
- GDP growth exceeds 1.50% QoQ consistently.
Bearish scenario (20% probability)
- Inflation remains sticky above 30%, forcing prolonged monetary tightening.
- Currency depreciation accelerates, raising import costs.
- Fiscal deficits widen, spooking markets.
- Growth slows below 0.50% QoQ, risking recession.
Turkey’s Q4 2025 GDP growth rate of 1.10% signals moderate economic resilience amid complex challenges. Monetary policy remains the key balancing act between taming inflation and supporting growth. Fiscal discipline and geopolitical stability will be critical to sustaining momentum.
Structural reforms and export diversification offer promising long-run growth pathways. However, external shocks and financial market volatility pose ongoing risks. Investors should monitor inflation trends, central bank signals, and geopolitical developments closely.
Overall, Turkey’s economy is navigating a delicate transition phase, with growth prospects cautiously optimistic but vulnerable to downside shocks.
Key Markets Likely to React to GDP Growth Rate QoQ
Turkey’s GDP growth rate influences multiple asset classes, especially those sensitive to economic momentum, inflation, and currency stability. Below are five tradable symbols historically correlated with Turkey’s macroeconomic shifts:
- BIST100 – Turkey’s main equity index, highly sensitive to GDP growth and investor sentiment.
- USDTRY – The USD/TRY currency pair reflects currency risk and monetary policy expectations.
- AKBNK – A leading Turkish bank, impacted by credit growth and economic cycles.
- BTCUSDT – Bitcoin’s price often reacts to emerging market risk sentiment, including Turkey’s macro shocks.
- EURTRY – Euro/Turkish lira pair, sensitive to geopolitical and trade developments affecting Turkey.
Insight: GDP Growth vs. BIST100 Since 2020
Since 2020, Turkey’s quarterly GDP growth rate and the BIST100 index have shown a positive correlation of approximately 0.65. Periods of GDP acceleration, such as mid-2024, coincided with BIST100 rallies exceeding 15%. Conversely, GDP contractions aligned with equity sell-offs. This relationship underscores the index’s sensitivity to macroeconomic fundamentals and policy shifts.
FAQs
- What does Turkey’s GDP Growth Rate QoQ indicate?
- Turkey’s GDP Growth Rate QoQ measures the quarterly change in economic output, reflecting the country’s short-term economic health and momentum.
- How does the latest GDP growth compare historically?
- The 1.10% growth in Q4 2025 is above the 12-month average of 0.70% but below the 1.60% recorded in the previous quarter, indicating moderate deceleration.
- What are the main risks to Turkey’s GDP growth outlook?
- Key risks include persistent inflation, currency volatility, geopolitical tensions, and potential fiscal imbalances that could slow growth or trigger recession.
Takeaway: Turkey’s 1.10% QoQ GDP growth in Q4 2025 reflects a cautiously optimistic economy balancing inflation control and growth support amid external and domestic challenges.
The Q4 2025 GDP growth rate of 1.10% outpaces the 0.80% consensus and improves on the 0.30% recorded in Q4 2023. However, it trails the 1.60% growth of the previous quarter, signaling a mild deceleration. The 12-month average growth rate of 0.70% confirms a moderate but uneven recovery trajectory.
Quarterly fluctuations highlight the economy’s sensitivity to domestic policy shifts and external shocks. The recent slowdown from 1.60% to 1.10% QoQ aligns with tighter monetary policy and cautious fiscal spending.