Turkey’s industrial production growth decelerated to 2.90% YoY in November 2025, down from a robust 7.30% in October. This marks a notable slowdown compared to the 12-month average of approximately 3.90% since January 2025. The data reflects a cooling phase after a strong rebound in mid-2025, influenced by volatile domestic demand and external headwinds.

Drivers this month

• Manufacturing output growth slowed amid weaker export orders.
• Energy sector production remained stable but failed to offset declines elsewhere.
• Supply chain disruptions and rising input costs pressured industrial firms.

Policy pulse

The 2.90% growth rate remains below the central bank’s inflation-adjusted target for industrial expansion, signaling potential challenges for monetary policy normalization. The Central Bank of the Republic of Turkey (CBRT) may maintain accommodative stances to support growth without stoking inflationary pressures.

Market lens

Immediate reaction: The Turkish lira (TRY) weakened 0.40% against the USD within the first hour post-release, reflecting investor caution. Short-term yields on government bonds edged higher, pricing in slower growth risks.

Industrial production is a core macroeconomic indicator reflecting manufacturing, mining, and utilities output. Turkey’s 2.90% YoY growth contrasts with earlier months in 2025, where readings fluctuated between -1.90% (April) and 8.30% (August), highlighting volatility in industrial activity.

Historical comparisons

• November 2025’s 2.90% is well below October’s 7.30%, marking the steepest monthly deceleration in nearly a year.
• The 12-month average growth since January 2025 stands at 3.90%, indicating that current growth is below trend.
• April’s contraction (-1.90%) was the last negative print, underscoring ongoing cyclical risks.

Monetary policy & financial conditions

The CBRT’s policy rate remains at 15%, balancing inflation control and growth support. Financial conditions have tightened slightly due to global rate hikes and TRY depreciation, which increase input costs for manufacturers. Inflation remains elevated at 45%, pressuring real industrial margins.

Fiscal policy & government budget

Fiscal stimulus measures, including infrastructure spending and export incentives, have supported industrial sectors. However, budget deficits remain elevated at 4.50% of GDP, limiting further fiscal expansion without risking debt sustainability.

Sectoral breakdowns reveal manufacturing growth slowed to 1.80% YoY, down from 6.50% in October, while mining and utilities held steady near 4%. Supply chain bottlenecks and energy price volatility contributed to uneven sectoral performance.

Market lens

Immediate reaction: The TRY/USD exchange rate depreciated by 0.40% post-release, reflecting market concerns over slower industrial growth. The BIST 100 index fell 0.70%, signaling investor caution in industrial and export-linked sectors. Short-term sovereign yields rose by 10 basis points, pricing in growth risks.

Looking ahead, Turkey’s industrial production faces a complex mix of risks and opportunities. We outline three scenarios based on current data and macro trends.

Bullish scenario (25% probability)

• Global demand recovers, boosting exports.
• CBRT maintains supportive monetary policy without triggering inflation spikes.
• Supply chain normalizes, reducing input costs.
• Industrial production rebounds to 5–6% YoY by mid-2026.

Base scenario (50% probability)

• Growth stabilizes around 3% YoY, consistent with current trends.
• Inflation remains elevated but contained.
• Fiscal stimulus offsets some external headwinds.
• Gradual improvement in industrial output through 2026.

Bearish scenario (25% probability)

• Geopolitical tensions disrupt trade flows.
• Inflation spikes force tighter monetary policy.
• Currency depreciation raises production costs sharply.
• Industrial production contracts or stagnates below 1% YoY.

Structural & long-run trends

Turkey’s industrial sector is undergoing structural shifts, including digitalization and green energy adoption. However, persistent inflation and external vulnerabilities constrain long-run growth. Enhancing productivity and diversifying export markets remain critical for sustainable expansion.

November’s 2.90% YoY industrial production growth signals a pause in Turkey’s recent rebound. While the slowdown tempers optimism, the sector’s resilience amid inflation and geopolitical risks is notable. Policymakers face a delicate balance between supporting growth and controlling inflation. Financial markets have reacted cautiously, pricing in uncertainty. The coming months will be pivotal in determining whether Turkey’s industrial base can regain momentum or face prolonged headwinds.

Key Markets Likely to React to Industrial Production YoY

Industrial production data in Turkey significantly influences several tradable markets. The Turkish lira (TRYUSD) often reacts swiftly to growth signals, reflecting currency risk. The BIST 100 index (XU100) tracks industrial sector health closely. Commodities like Brent crude (UKOIL) impact energy costs for manufacturers. The USDTRY forex pair is sensitive to monetary policy shifts triggered by industrial trends. Lastly, the cryptocurrency Bitcoin (BTCUSD) sometimes moves on broader risk sentiment linked to economic data.

• TRYUSD – Currency sensitive to Turkey’s growth and inflation outlook.
• XU100 – Turkey’s main stock index, reflecting industrial sector performance.
• UKOIL – Brent crude oil prices affect industrial energy costs.
• USDTRY – Forex pair sensitive to monetary policy and growth data.
• BTCUSD – Cryptocurrency reflecting broader risk sentiment.

FAQs

What does Turkey’s Industrial Production YoY indicate?

It measures the annual change in Turkey’s industrial output, reflecting manufacturing, mining, and utilities performance.

How does Industrial Production affect Turkey’s economy?

It signals economic health, influencing monetary policy, investment, and currency strength.

What are the risks to Turkey’s industrial growth?

Risks include inflation, geopolitical tensions, currency volatility, and global demand fluctuations.

Takeaway: Turkey’s industrial production growth slowdown to 2.90% YoY highlights emerging challenges but leaves room for recovery if policy and external conditions improve.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.