Monthly Economic Bulletin 31.08.2026

This bulletin is the monthly synthesis of the Weekly Türkiye Economic Bulletins covering 3-9, 10-16, 17-23, 24-28 August and 31 August-4 September. Prepared on: 5 September 2026.

Markets During the Month

Throughout August, the exchange rate followed a limited and steady upward trend, while the BIST-100 gained value for four consecutive weeks and moved into record territory. On the commodities side, tensions in the Strait of Hormuz caused sharp moves in Brent and gold around mid-month, while Fed Chair Warsh's hawkish remarks at month-end triggered a correction in gold prices.

▲ green = value increased · ▼ red = value decreased · grey = unchanged. Dates are the market closing days used in the weekly bulletins (mostly Fridays); TCMB reserve data carry the previous week's reference date due to the weekly publication lag. * In the week of 7 August, TCMB reserve data were based on the 31 July reference date (publication lag).

The "monthly change" in the benchmark bond yield is expressed in basis points, not percent. Since no month-opening (31 July) closing value is available for CDS, Brent and gold, the "monthly change" column for these three indicators reflects the difference between 7 August and 28 August, rather than the full calendar month.

Inflation and Monetary Policy

Inflation Outlook

The July CPI announced by TÜİK on 3 August had risen by 1.78% month-on-month and 31.75% year-on-year. The August CPI measured at month-end (announced on 3 September) rose by 1.84% month-on-month and 31.51% year-on-year; the slight decline in the annual rate compared with July indicates that the disinflation process continued, albeit slowly. The annual Domestic PPI rate of 27.95% remained below consumer inflation.

TCMB Third Inflation Report (13 August)

In the report presented by TCMB Governor Fatih Karahan, the year-end inflation forecast was raised from 26% to 28%, with higher assumptions for diesel/natural gas prices, import prices and food inflation (28.5%) cited as reasons. However, the 24% interim target, the projections for 2027 (15%) and 2028 (9%), and the 5% medium-term target remained unchanged.

Divergence in Expectations and the Loan-Deposit Rate Spread

In the Sectoral Inflation Expectations released on 24 August, the household expectation for twelve months ahead increased to 45.58%, while market participants' expectation declined to 23.69%; the real sector stood at 32.80%, in the middle of the 21.89-point gap. In the weekly flow interest rate statistics published on 27 August, the TRY commercial loan rate rose to 53.94%, while the TRY deposit rate declined to 46.42%.

Public Finances and Foreign Trade

Budget and Debt Stock

The July 2026 central government budget announced by the Ministry of Treasury and Finance on 17 August posted a deficit of TRY 378.1 billion (July 2025: TRY 23.8 billion deficit); expenditures rose by 59.8% year-on-year to TRY 1.79 trillion, while revenues increased by 28.8% to TRY 1.41 trillion, and the primary balance shifted from a TRY 110.7 billion surplus to a TRY 51.3 billion deficit. The cumulative January-July deficit reached TRY 1.32 trillion, while seven-month interest expenditures amounted to TRY 1.79 trillion. According to data announced on 20 August, the central government gross debt stock reached TRY 15,463.3 billion as of 31 July; the monthly increase was TRY 470.8 billion, and nearly half of the stock was denominated in foreign currency (TRY 7,892 billion).

Foreign Trade

According to final July data released by TÜİK on 28 August, exports increased by 2.9% year-on-year to USD 25.623 billion, while imports rose by 5.1% to USD 32.966 billion; the deficit expanded by 13.6% to USD 7.343 billion, and the export-to-import coverage ratio declined from 79.4% to 77.7%. August's own foreign trade data (Ministry of Trade, 3 September) showed exports rising by 8.1% to USD 23.47 billion, imports increasing by 10.5% to USD 28.71 billion, and the deficit reaching USD 5.24 billion. Cumulative exports for January-August reached a historic high of USD 185.0 billion.

Banking, Labour Market and Real Sector

Banking Sector and the Phase-Out of FX-Protected Deposits

According to BRSA data for the week of 21 August, published on 28 August, the FX-protected deposit scheme (KKM), introduced at the end of 2021, was fully phased out after a final weekly decline of TRY 4 million. In the same period, total loans rose to TRY 27.734 trillion and total deposits to TRY 32.316 trillion; non-performing loans increased to TRY 838.968 billion, while the provisioning ratio remained at 74.3%. Consumer loans reached TRY 3.424 trillion, while the individual credit card balance approached that amount at TRY 3.353 trillion.

Labour Market and Growth

According to the 2026 Q2 quarterly labour force survey data announced by TÜİK on 19 August, the seasonally adjusted unemployment rate was 7.9%, while employment rose to 32 million 479 thousand people (quarterly +155 thousand). Employment increased by 240 thousand in services, while declining by 121 thousand in industry. In the Short-Term Labour Statistics published on 21 August, the employment index increased by 1.7% year-on-year and hours worked by 2.7%, while the gross wage-salary index rose by 35.8% and hourly labour cost by 34.0%.

At month-end, on 31 August, TÜİK announced monthly labour force statistics and quarterly GDP growth as separate series: the July 2026 unemployment rate rose to 8.1%, GDP growth in 2026 Q2 was 2.3% year-on-year (1.1% quarter-on-quarter), and full-year growth for 2025 was 3.7%.

Confidence Indices

Confidence indices released during the month painted a mixed picture: services (111.9), retail trade (110.1) and construction (83.1) confidence indices all declined month-on-month in August (25 August), while the consumer confidence index rose to 90.8 (+1.0%, 21 August) and the real sector confidence index increased to 102.4 (+1.2 points, 21 August); the capacity utilisation rate declined to 73.5% (-0.3 points). The Economic Confidence Index rose by 0.8% to 100.6 on 28 August, moving above the reference value of 100.

Regulation: Monthly Summary

Among the regulations published in the Official Gazette during August, the following were the key items directly relevant to professional practice and tax/financial legislation (the full list appears in the weekly bulletins).

Ratings, Global Framework and Companies

Credit Ratings

Japanese rating agency JCR affirmed Türkiye at BB with a stable outlook on 21 August; this rating stands one notch above the BB- ratings assigned by Fitch and S&P. The year-to-date framework is as follows: Moody's (25 July, Ba3/stable), Fitch (17 July, BB-/stable — revised from positive to stable on 10 April), S&P (17 April, BB-/stable), and R&I (27 February, upgrade from BB- to BB). Remaining scheduled reviews are 16 October for S&P and 23 October for Scope.

Global Framework

Fed Chair Kevin Warsh delivered his first Jackson Hole Symposium speech on 28 August; following a more hawkish-than-expected message, the probability of a September rate hike jumped to 57.5%, with the next FOMC meeting scheduled for 15-16 September. The ECB did not meet in August; it had delivered its first rate hike in three years on 11 June (due to energy inflation arising from the Iran conflict) and left rates unchanged on 23 July; its next meeting will be held in Berlin on 9-10 September. Tensions in the Strait of Hormuz were among the key drivers of Brent and gold prices throughout the month; by month-end, the premium eased as flows returned to roughly 80% of pre-war levels.

Companies and Capital Markets

Kapeks Kimya (KPEKS) began trading on Borsa İstanbul on 21 August. CCOLA received an administrative fine of TRY 2.12 billion from the İzmir Customs Directorate; Fikret Petrol İstanbul was granted a three-month temporary concordat period on 17 August. Numerous capital increases (CASA, CWENE, NETAŞ) and debt instrument issues/approvals (Akbank USD 8 billion, Anadolu Efes USD 1 billion, QNB Türkiye TRY 60 billion, OTKAR, YKBNK) were announced during the month. MSCI index changes became effective as of the 31 August close.

Looking Ahead to September

The most decisive date in September will be the 10 September MPC meeting, when the decision on the policy rate, unchanged since 23 July, will be announced; the meeting summary will be published on 17 September. The ECB will meet in Berlin on 9-10 September, while the Fed will convene for its FOMC meeting on 15-16 September. Under the Treasury's September-November 2026 Domestic Borrowing Strategy, the September borrowing target is projected at TRY 257.9 billion. TÜİK is expected to publish the July 2026 Industrial Production Index.

Sources

This bulletin is a synthesis of the Weekly Türkiye Economic Bulletins (Issue 2026/1: 3-9 August; Issue 2026/2: 10-16 August; Issue 2026/3: 17-23 August; Issue 2026/4: 24-28 August; Issue 2026/5: 31 August-4 September) and the TCMB's directly published current exchange-rate and reserve data.

This bulletin is for general information purposes only and does not constitute investment advice or regulatory consultancy. The data have been compiled from official sources and previously published weekly bulletins.