Turkey’s economy expanded by 3.6 percent in 2025, official data showed on Monday, with growth easing in the final quarter as tight monetary policy weighed on domestic demand.
The Turkish Statistical Institute (TurkStat) said gross domestic product (GDP) increased by 3.4 percent year-on-year in the fourth quarter. On a seasonally and calendar-adjusted basis, the economy grew by 0.4 percent from the previous quarter, slowing from 1 percent growth recorded in the third quarter.
Economists had expected annual growth of around 3.6 percent in the fourth quarter.
For the full year, Turkey’s GDP rose 3.6 percent, up from 3.2 percent growth in 2024 but below the more than 5 percent expansion recorded in 2023.
In current prices GDP surged 41.3 percent in 2025 to 63 trillion 20.9 billion Turkish lira. Per capita income was calculated at 712,200 lira, or $18,040, marking a modest increase in dollar terms compared to previous years.
Construction leads, agriculture contracts
Sectoral data showed construction posting the strongest annual growth in 2025 at 10.8 percent. Information and communications grew by 8 percent, while taxes on products, minus government subsidies, increased by 6.9 percent. Trade, transportation, accommodation and food services expanded by 4.6 percent.
Industry grew by 2.9 percent, financial and insurance activities by 3.8 percent and real estate activities by 2.7 percent. Growth in public administration, education, health and social services was limited to 1 percent.
Agriculture contracted sharply, shrinking by 8.8 percent over the year.
Foreign trade data pointed to a negative contribution from net exports. Exports of goods and services declined by 0.3 percent in 2025, while imports rose by 4.9 percent.
In the fourth quarter alone, exports fell by 2.3 percent year-on-year and imports increased by 3.8 percent, suggesting that external demand made a limited contribution to overall growth.
In current prices fourth quarter GDP rose 41.4 percent from a year earlier to 18.47 trillion lira, equivalent to $438.6 billion.
Tight policy stance
The slowdown in quarterly growth comes as policymakers maintain a tight monetary stance aimed at curbing inflation, which remains above 30 percent annually.
The moderation from 1 percent quarterly growth in the third quarter to 0.4 percent in the fourth quarter shows that high borrowing costs and restricted credit conditions are weighing on household consumption.
Turkey’s central bank is set to announce its next interest rate decision on March 12. Policymakers have said they seek a more balanced and sustainable growth model in which domestic consumption is not the primary driver, according to a Bloomberg report.
The central bank last month revised its year-end inflation forecast upward, projecting inflation to a range between 15 percent and 21 percent. Economists expect February inflation data, due later this week, to show annual consumer price growth exceeding 31 percent.
The latest GDP figures are likely to factor into the bank’s upcoming rate decision as authorities attempt to strike a balance between disinflation efforts and economic growth.