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Türkiye's gross domestic product (GDP) is expected to grow by 4.4% in 2026, with acceleration particularly in the second half of the year, U.S.-based investment bank JPMorgan forecasted on Wednesday.
In the third quarter of the year, Türkiye's economy expanded by 3.7% year over year, driven by robust household consumption and fixed capital formation.
According to a client note, the bank also projected a brighter outlook for the Turkish retail and consumer sector throughout the year, anticipating that the challenging conditions would ease to allow for a recovery.
JPMorgan analysts said that, faced with soft consumer sentiment and intensifying competition in 2025, many Turkish consumer companies turned to aggressive promotional campaigns to protect market share.
This approach, while boosting short-term sales, resulted in a 20% drop in real earnings as companies absorbed higher costs to maintain demand.
The analysts noted that both declining revenues and compressed margins weighed heavily on performance throughout the year. Looking ahead to 2026, JPMorgan projected a gradual earnings rebound in Türkiye’s retail sector, driven primarily by easing cost inflation and favorable year-on-year base effects.
However, the report stressed that the consumer remains fragile, even as the broader macroeconomic environment shows signs of stabilization.
In October, Türkiye's consumer confidence index rose to 85—the highest since June 2023—reflecting continued improvement in household sentiment toward the economy, job prospects, and future spending intentions.
The report also anticipated a continued, though gradual, disinflation process, which may provide some relief to both consumers and businesses dealing with elevated input costs.
As of November, annual inflation dropped to 31.07%, paving the way for more rate cuts from the Turkish central bank to maintain the ongoing easing cycle toward the current 39.5% policy rate.
Among the key macro drivers cited, the analysts also reiterated their expectation of an approximately 25% increase in Türkiye’s minimum wage for 2026 to ₺27,630 ($648.62), in line with 12-month ahead inflation forecasts.
The minimum wage serves as a critical reference point in Türkiye, directly affecting the income of millions of workers and shaping consumption patterns across the retail landscape, it noted.
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