ASO CHAIRMAN SEYİT ARDIÇ EVALUATES FIRST-QUARTER 2026 GROWTH FIGURES

“THE LOSS OF MOMENTUM SIGNAL WE RECEIVED FROM INDUSTRIALISTS IN THE FIELD HAS BEEN CONFIRMED BY THE GROWTH DATA”

“THE CONTRACTION IN INDUSTRY AND LOSS OF COMPETITIVENESS MUST BE CAREFULLY EVALUATED”

The growth rate of 2.5 percent announced for the first quarter of 2026 reveals not only the pace of growth in our economy but also the quality of that growth. For us, it is just as important to understand which sectors are driving growth as it is to know how much the economy is growing.

The first-quarter growth figures indicate that the divergence among sectors within the economy is becoming more pronounced. While demand-side factors continue to support growth, the weakness on the supply side presents a picture that must be carefully assessed, particularly in terms of sustainable growth.

Recent feedback we have received from ASO member industrialists, our professional committees, and the field has pointed to a loss of momentum in production, investment, and exports. The first-quarter 2026 growth data released by the Turkish Statistical Institute (TÜİK) confirms that the slowdown in industry is now clearly reflected in the statistics.

The 0.8 percent contraction in industry is an important warning signal in terms of growth quality, production capacity, and medium-term competitiveness. While the industrial sector made a strong contribution to growth during the second and third quarters of 2025, this contribution declined to 0.9 percent in the final quarter of the year. In the first quarter of 2026, industrial production contracted by 0.8 percent, exerting downward pressure on overall growth.

On the other hand, we observe that growth in gross fixed capital formation, which stood at 11.5 percent in the third quarter of 2025 and 5.4 percent in the fourth quarter, declined to 3 percent in the first quarter of 2026. This decline makes the weakening investment appetite of industrialists clearly visible. The slowdown in investment is also having a significant impact on industrial sectors producing capital goods.

The most pronounced deterioration in the growth figures is occurring in foreign trade. The 12.7 percent decline in exports of goods and services sends a very strong negative signal. Weak external demand, the exchange rate-cost balance, geopolitical and logistical pressures, and rising energy prices are all creating significant pressure on our exports.

The fact that imports have decreased far less than exports may lead to both weaker growth momentum and a widening current account deficit in the period ahead. It is therefore of great importance to closely monitor this process, taking into account geopolitical and cyclical developments, and to develop proactive policy measures.

LOSSES IN EXPORT MARKETS MAY TAKE YEARS TO RECOVER

This picture shows that even though our economy continues to grow, the contraction in industry and the loss of competitiveness must be carefully evaluated. The losses experienced by our industrialists in terms of competitiveness and export markets may take many years to recover. For sustainable and long-term growth, policies that improve the production and investment environment and support exports and productivity gains should be prioritized.

Today, our industrialists are simultaneously struggling with high financing costs, the pressure of a strong Turkish lira on export competitiveness, rising input costs, and slowing global demand. Under these conditions, maintaining production, making investments, and preserving export markets have become more challenging than ever.

As industrialists, we are going through a period in which we are financing not only today’s costs but also tomorrow’s uncertainties.

Therefore, the primary objective of economic policies in the period ahead should be to establish a balance that preserves production capacity while maintaining the goal of price stability. The disinflation process is undoubtedly important; however, it should not weaken the real sector, undermine the willingness to produce, or lead to the postponement of investment decisions.

Price stability and a production-oriented economy are not alternatives to one another; they are complementary pillars of sustainable economic development.