Weekly Economic Bulletin - 17.08.2026 - 23.08.2026

Executive Summary

FOUR KEY HEADLINES OF THE WEEK

Market Dashboard

21.08.2026 CLOSE · VERSUS 14.08.2026 CLOSE

Positive for the Türkiye economy   Negative   No change   Arrow direction indicates price movement; colour indicates favourability.

Official Indicators

DATA RELEASED THIS WEEK

Public finances: Budget balance deteriorated sharply in July, debt stock increased by 470,8 billion TL in one month

The Ministry of Treasury and Finance's central government budget outturn for July 2026, announced on 17.08.2026, showed a deficit of 378,1 billion TL; a surplus of 23,8 billion TL had been recorded in July 2025. Expenditures rose by 59,8% year-on-year to 1,79 trillion TL, while revenues increased by only 28,8% to 1,41 trillion TL; tax revenues were 1,23 trillion TL (+%30), and interest expenditure for the single month was 326,8 billion TL. The primary balance swung from a 110,7 billion TL surplus to a 51,3 billion TL deficit. Cumulatively for January–July, the deficit was 1,32 trillion TL, seven-month interest expenditure was 1,79 trillion TL, and the primary surplus was 470,1 billion TL. According to data published on 20.08.2026, central government gross debt stock stood at 15.463,3 billion TL as of 31 July 2026, representing a monthly increase of 470,8 billion TL and an increase of approximately 1,19 trillion TL since the beginning of the year; 7.571 billion TL of the stock was denominated in TL and 7.892 billion TL in foreign currency. The fact that revenue growth remained at roughly half the pace of expenditure growth points to increasing administrative pressure on tax collection performance over the remainder of the year.

Labour force and labour costs: Employment is rising, unit costs remain above inflation

TurkStat's bulletin dated 19.08.2026 reported that, in 2026 Q2, the seasonally adjusted unemployment rate was %7,9 and the number of unemployed persons was 2 million 799 thousand (a quarterly decrease of 84 thousand); employment increased by 155 thousand to 32 million 479 thousand, the employment rate reached %48,5, and the labour force participation rate reached %52,7. The composition of the improvement in the headline rate should be read carefully: employment in services increased by 240 thousand, while industrial employment declined by 121 thousand; the labour underutilisation rate remained at %29,9 and youth unemployment at %13,9. The Short-Term Business Statistics dated 21.08.2026 showed that in Q2 the employment index increased by %1,7 year-on-year and the hours worked index by %2,7; by contrast, the gross wages and salaries index rose by %35,8 and the hourly labour cost index by %34,0. Industrial employment declined by %2,2, while hourly labour costs increased by %34,0 in industry and by %35,3 in trade and services. The fact that wage growth is running far above employment growth is a trend that should be monitored in gross profit margin and transfer pricing analyses for labour-cost-intensive taxpayers.

External debt, reserves and banking: Rapid reserve recovery, external debt reaches a 539-billion-dollar peak

According to the CBRT's weekly data dated 20.08.2026, total gross reserves increased by 5.134 million dollars in the week of 14 August to 183,5 billion dollars; gross foreign exchange reserves rose to 75,166 billion dollars (+4,144 billion) and gold reserves to 108,335 billion dollars (+0,99 billion). Net reserves excluding swaps reached 54,3 billion dollars, representing an accumulation of approximately 16 billion dollars over the last three weeks. External Debt Statistics published on the same day showed that gross external debt stock reached 539 billion dollars as of 2026 Q2, up %3,5 quarter-on-quarter: 170,7 billion dollars was short-term and 368,2 billion dollars long-term; the public sector accounted for 197,9 billion dollars, the private sector 318,0 billion dollars (+%4,2), and the CBRT 23,1 billion dollars. In the BRSA's weekly bulletin dated 20.08.2026, sector loan volume stood at 27,683 trillion TL and deposits at 31,810 trillion TL, while non-performing loans rose to 833,304 billion TL and the KKM balance effectively came to an end, falling to 4 million TL. The simultaneous reserve accumulation and the %4,2 quarterly increase in private-sector external debt show that exchange-rate risk is shifting from the public sector to the real sector.

Table 1 — Official data calendar for the week (17–21 August 2026)

Regulatory Calendar

OFFICIAL GAZETTE · 17–22 AUGUST 2026 (ISSUES 33343–33348)

Economic Agenda

RATINGS, INTERNATIONAL INSTITUTIONS, COMPANIES, GLOBAL

Credit ratings

There is no scheduled sovereign rating review in August 2026. The framework for the year is as follows: on 24 January, Fitch affirmed the BB- rating and revised the outlook to Positive, while Moody's maintained Ba3/Stable. On 11 April, in an unscheduled action, Fitch affirmed the BB- rating but revised the outlook back to Stable, citing the reserve loss following geopolitical tensions. In July, Moody's maintained Ba3/Stable. This week, only company-level rating actions were observed: AVOD and ADEL's national ratings were downgraded, while SASA was assigned B-/Stable by S&P. The three-week recovery in reserves partly offsets the main variable underlying Fitch's April outlook downgrade.

Foreign investor flows

According to the CBRT's securities statistics dated 20.08.2026, in the week of 14 August non-residents made net purchases of 176,1 million dollars in equities and 445,9 million dollars in private-sector debt instruments, while recording net sales of 306,2 million dollars in DİBS. Equity holdings rose to 41,72 billion dollars, while DİBS holdings declined to 18,14 billion dollars. The shift in foreign investor interest from government debt securities to equities and private-sector bonds points to pricing based more on growth and exchange-rate stability than on interest-rate expectations.

Companies and capital markets

Kapeks Kimya (KPEKS) began trading on Borsa İstanbul on 21 August.

Debt instrument issuance approvals: Akbank 8 billion dollars, Anadolu Efes 1 billion dollars, QNB Türkiye 60 billion TL, Yapı Kredi 30 million dollars.

İş Bankası signed a 200 million dollar loan agreement with ICBC Group.

Bilici Yatırım approved a %900 bonus issue and Lider Faktoring a %51,5 bonus issue; Euro Holding's application for a private placement capital increase was rejected.

MSCI index changes will take effect from the close on 31 August.

Global backdrop

The week's global pricing was driven by two themes. The first was the geopolitical risk premium: reduced tanker traffic in the Strait of Hormuz pushed Brent up by more than %7 and carried gold per ounce to its third consecutive weekly gain. For Türkiye, this directly pressures the energy import bill and the current account balance. The second was the direction of US monetary policy: Fed Chair Kevin Warsh signalled that he was prepared to raise interest rates at the September meeting if inflation came in above expectations; futures markets priced the probability of a 25-basis-point increase at the 16 September FOMC meeting at approximately %55. For emerging-market assets, the directional risk has shifted from easing toward tightening.

Next Week's Calendar

24–30 AUGUST 2026

Table 2 — Items to watch

SENTENCE OF THE WEEK

Sources

PRIMARY AND MARKET SOURCES

This bulletin contains a weekly assessment of data compiled from publicly available sources and is intended solely for informational purposes. The observations contained herein do not constitute a professional opinion in respect of any specific transaction or taxpayer.