ING forecasts Turkey’s GDP growth at 3.9% in 4Q25, implying 3.8% growth for 2025, with domestic demand driving activity but showing some quarterly loss of momentum.
February inflation is expected to remain elevated at 2.9% month on month, with annual inflation projected at 31.4% year on year versus 30.7% the prior month.
Growth And Inflation Outlook
Food prices ahead of Ramadan are cited as an upside risk to inflation, and a more negative inflation print could lead the central bank to pause tightening at the March MPC meeting.
The article notes it was produced with the help of an AI tool and reviewed by an editor.
Looking back at early 2025, the economy showed resilient growth driven by strong domestic spending, while the key concern was sticky inflation expected to rise to 31.4% year on year, creating uncertainty over the central bank’s interest rate path.
That dynamic has since evolved as inflation stayed high through most of last year, peaking near 55% in the third quarter, and while it cooled to 42.6% as of January 2026 it remains well above target, keeping the policy rate at 50% and finally slowing the domestic demand that fueled 2025 growth.
Trading Implications Across Markets
For rates traders, the key question is the timing of the first cut, and with the policy rate steady for four months derivatives markets price easing from the third quarter, though any inflation reacceleration could delay that and shift opportunities in forward rate agreements.
In FX, TRY volatility remains central, with carry appeal from high rates offset by risks of abrupt policy shifts or geopolitical headlines, making option straddles a potential way to position for large moves without taking directional risk.
For equity derivatives, the Borsa Istanbul 100 sits between slowing growth and the prospect of eventual cuts, suggesting a range bound setup where selling index futures near the top of the recent range and buying near the bottom may suit short term trading, while index options can hedge downside if growth data disappoints.
