Turkish economy will stabilize in 2026: İşbank CEO

ISTANBUL

Once inflation is brought under control and price stability is achieved, Türkiye’s economy will reach stabilization and relief will only be seen in 2026, says Hakan Aran, the head of private lender İşbank.

In a statement to Anadolu Agency marking the bank's 100th anniversary, Aran noted that in the first six months of the year, a strict monetary tightening was implemented, as the priority was to ensure price stability and reduce inflation.

Noting that the decline in production, demand and employment will deepen, Aran said the “stress here also manifested itself in confidence indices.”

“If our goal is to achieve price stability and reduce inflation, we will also pay the price for this,” he added.

Saying that he expects economic growth to be around 3.5 percent this year in Türkiye and that the economy has cooled down as a result.

The Central Bank will not take any action in October but will only signal through verbal and written guidance that it may start to cut interest rates in the following period, according to Aran.

“Once it is clear that annual inflation and the inflation trend will be permanently shaped below the policy rate level, there will be an opportunity for interest rate cuts of 250 basis points starting in November, and the policy rate can be reduced to 45 percent by the end of this year and 25 percent by the end of next year.”

The bank's policy interest rate is at 50 percent currently.

This, combined with factors such as the control of inflation in Türkiye, the functioning of the economic system and the easing of the burden on the real sector, allows the country to look to 2026 with hope, Aran said.