An early and a brief start

TURKEY - Report 31 Aug 2025 by Murat Ucer and Atilla Yesilada

We’ve decided to end the summer holiday of our Sunday Weekly earlier than planned, with a very brief update on the latest political and economic developments.

Turkey experienced the hottest August in at least 30 years, which triggered crop failures, forest fires, and general lethargy among citizens. Nevertheless, politics were in full swing. The politics author very briefly explains the key developments along three axes, namely, President Erdogan vs. CHP, cracks within the People’s Alliance and “the Peace Commission”.

On the econ front, August confidence indicators and July labor market data showed more of the same, i.e., a stagnant economy, while real wages continued to hold up through the second quarter. On the external side, the details of the July trade data confirmed some improvement in external trade dynamics, in line with the preliminary data released earlier. In other news, the corporate sector’s short F/X position continued to rise through June, the infamous “KKM” scheme was terminated and reserves continued to hold up, broadly speaking.

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