All eyes on CHP and reserves

TURKEY - Report 07 Jun 2026 by Murat Ucer

We’ve reported on Q1 growth and May inflation data last week, which, in a nutshell, leave us with a stagflationary picture, with economic activity barely moving sequentially, and annual CPI inflation edging up further to 32.6% (from 32.4% in April).

The rebound in manufacturing sector PMI in May created a contrast of sorts, but we need to see June data and beyond, to gauge whether this is just a correction from the depressed April print, or a trend reversal.

As a matter of fact, attesting to the weakness in economic activity, imports were rather weak in May, declining more than exports over the same month of 2025, with the 12-month rolling deficit thus improving further (while the weakness in both imports and exports relative to the same month in 2025 resulted from markedly fewer working days in May this year). It sure is too soon to call this one a trend reversal as well, but the May trade numbers are encouraging, given that the current account/balance of payments dynamic is the most important macro indicator to monitor in the next several months, we think.

Now read on...

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