Turkey's economy cools more than expected in first quarter amid US-Israel & Iran war

Turkish economy expands 2.5% in Q1

Turkey's GDP grew 2.5% YoY in Q1 2026, a third consecutive deceleration, with the IT sector outperforming at +9.5% while industry contracted 0.8%. Annual inflation at 32.87% and a revised central bank target of 24% signal sustained monetary tightening ahead, raising the cost of capital for any expansion or M&A in the region.