FX.co ★ Turkey GDP Growth Smallest Six Years

The Turkish economy grew by 2.3% year-on-year in Q2 2026, slowing from an upwardly revised 2.6% in Q1 and undershooting market expectations of 2.9%. This was the weakest expansion since the contraction recorded in Q2 2020.

The loss of momentum was largely driven by softer domestic demand. Household consumption growth eased to 3.5% from 5.1% in the previous quarter, while fixed investment almost stalled, rising just 0.6% compared with 3.1% in Q1. Government consumption also weighed on growth, falling 1.8% after a 0.8% increase in the prior period.

Net trade made a mixed contribution. Exports declined 3.4% year-on-year, an improvement on the 12.7% drop in Q1, while imports contracted more sharply, by 6.4% compared with 2.0% previously.

On the production side, construction output returned to contraction, falling 1.9% after a 3.2% increase in Q1. Activity also cooled in trade, transportation, accommodation and food services, where growth slowed to 0.5% from 3.5%, and in information and communication, where growth eased slightly to 8.6% from 9.0%.

By contrast, manufacturing activity rebounded, expanding 2.4% after a 1.3% decline in the first quarter. Growth also strengthened markedly in agriculture, forestry and fishing, accelerating to 13.3% from 4.8%.

On a quarterly basis, GDP rose 1.1% in Q2, its strongest increase in a year, following a 0.3% expansion in Q1.