New company registrations in Turkey down 13 pct as monetary policy weighs on business climate

The number of new companies established in Turkey fell 13.1 percent in January compared to December, dropping to 11,115 as high interest rates and economic uncertainty continued to weigh on entrepreneurial activity, according to data from the Turkish Union of Chambers and Commodity Exchanges (TOBB) published Thursday.

The total capital of newly formed companies dropped even more sharply, falling 39.9 percent month-over-month to 35.2 billion lira ($802 million). Company closures, however, plunged 78 percent to 1,604, suggesting that while fewer entrepreneurs are starting new businesses, existing firms are managing to stay afloat.

The data reflect the impact of Turkey’s prolonged monetary tightening campaign. The Turkish Central Bank has maintained elevated interest rates as part of an effort to bring down inflation, which has remained above 30 percent since 2021 and reached peaks of 85 percent in November 2022 and 75 percent in May 2024 before declining to around 31 percent by the end of 2025. The bank cut its benchmark policy rate from 50 percent to 38 percent over the course of last year, but the gap between nominal rates and inflation remains high, making borrowing expensive for small and medium-sized businesses.

Compared to January 2025, the number of new companies rose just 0.7 percent, a marginal year-over-year gain that suggests business formation has largely stagnated despite a modest recovery in the broader economy. Turkey’s GDP grew 3.7 percent in the third quarter of 2025, down from a peak of 4.9 percent in the second quarter, and the OECD projects growth will moderate further to 3.4 percent in 2026 before recovering to 4 percent in 2027.