Türkiye’s economy likely posted firmer-than-expected growth in the second quarter of 2026 despite the conflict in the Middle East, according to a new report by BBVA Research, which said industrial activity supported growth while services remained flat and construction continued to weaken.
BBVA Research estimated annual GDP growth of 3 percent for the second quarter, implying quarter-on-quarter growth of around 1 to 1.5 percent. The bank said hard economic data surprised on the upside compared with its earlier expectations.
The report noted that domestic demand softened noticeably during the quarter, with private consumption likely contracting from the previous quarter.
At the same time, temporary factors helped exports recover on a quarterly basis despite weak underlying external demand. Falling imports also contributed positively, allowing net exports to make a positive contribution to both annual and quarterly growth in the second quarter, said the report.
According to BBVA Research, tighter financial conditions led to a marked slowdown in consumer lending and private consumption, supporting the disinflation process.
However, the report warned that geopolitical-driven energy price volatility, persistent inflation inertia and elevated inflation expectations continue to pose risks to the economic outlook.
Under its baseline scenario of gradually normalizing energy prices and a prudent policy mix, the bank maintained its 2026 GDP growth forecast at 3 percent, while identifying a renewed escalation of geopolitical tensions and higher energy prices as the main downside risks.
