GROWTH STALLED IN THE FIRST QUARTER
Seyfettin Gürsel and Saliha Tanrıverdi
Executive Summary
The Turkish economy grew by 2.5% year-on-year and 0.1% quarter-on-quarter in the first quarter of 2026 (Figure 2). As in the fourth quarter of 2025, private consumption made the largest contribution to economic growth in the first quarter of 2026. Quarterly growth in private consumption slowed from 4.2% to 0.1%. With an annual increase of 4.8%, private consumption alone accounted for 2.7 percentage points of overall growth. Government consumption also increased both year-on-year and quarter-on-quarter. Investment rose by 3% year-on-year, contributing 0.9 percentage points to growth, but declined by 2.2% quarter-on-quarter, reducing growth by 0.7 percentage points. Foreign trade components also weakened on both an annual and a quarterly basis. In particular, a 12.7% year-on-year contraction in exports reduced growth by 3.3 percentage points. Without the 1.1-percentage-point contribution from changes in inventories, quarterly growth would have been negative. Looking ahead, the trajectory of growth will depend on the Central Bank of the Republic of Türkiye (CBRT) monetary policy stance and whether the momentum in private consumption can be sustained.