Türkiye's consumer goods sector is expected to recover in 2026 after a difficult year marked by shrinking profitability, JPMorgan said on Wednesday, amid progress with disinflation and stabilizing costs.
The U.S. investment bank said it anticipates a 25% increase in the minimum wage this month, in line with its 12-month inflation forecast, adding that slowing price growth should provide relief to corporate balance sheets.
Annual inflation surprised in November as it cooled more than expected to 31.07%. The figure, which had peaked at about 75% in May 2024, is now at its lowest level since November 2021.
The Turkish central bank's end-2025 inflation target stands at 24%, with its forecast range at 31%-33%. It sees inflation easing to about 16% in 2026.
In a report on Wednesday, JPMorgan said companies seeking to defend market share amid weakening consumer sentiment launched aggressive promotional campaigns this year, causing real profits to drop by around 20%.
It described Turkish consumer-related stocks as still attractively valued, trading at 20% below their 10-year average and at roughly a 35% discount compared to international peers.
Closing this gap will require interest-rate cuts, the bank said.
The Central Bank of the Republic of Türkiye (CBRT) slowed its easing cycle after higher-than-expected inflation in August and September. In October, it delivered a 100-basis-point cut that brought its benchmark policy rate to 39.5%.
Markets are closely monitoring the bank's final Monetary Policy Committee (MPC) meeting of the year on Thursday. It is widely expected to again cut the one-week repo rate by 100 basis points.
Despite tight policy, JPMorgan said economic activity in Türkiye remained stronger than expected this year, supported by rising private spending. The bank expects the economy to grow 3.8% in 2025 and 4.4% in 2026.
Türkiye's gross domestic product (GDP) expanded by 3.7% in the third quarter, according to last week's official data, the same pace at which it grew in the first nine months.
JPMorgan highlighted a sharp divergence among income groups in Türkiye.
The wealthiest 20% of households continued to spend robustly, helped by rising gold prices, providing support for growth, while middle- and lower-income consumers came under pressure. This forced companies to offer heavy discounts and prevented them from passing cost increases through to prices in time.
The bank said it expects food retailers' margins to improve next year as fixed costs stabilize and inflation continues to fall.
The report identified supermarket chains BIM and Migros, and beverage company Coca-Cola Içecek (CCI) as the companies likely to benefit the most.
The hard-discount store chain BIM is expected to gradually regain pricing power as disinflation progresses.
Migros is projected to deliver a 1-percentage-point increase in its profit margin, leading the sector in earnings before interest, taxes, depreciation and amortization (EBITDA) growth due to disciplined cost management and operational innovation.
Coca-Cola Içecek is forecast to post 7.5% volume growth in 2025 and 5% in 2026, positioning it once again among the fastest-growing global beverage producers, JPMorgan said.
The report said CCI shares trade at roughly a 50% discount to global peers, while improvements in margin outlook support valuation.
Among exporters, JPMorgan said home appliance maker Arçelik would be one of the main beneficiaries of future interest-rate cuts after banks, but a slower-than-expected easing cycle has delayed its anticipated recovery. Competition from Chinese manufacturers in the European market also remains a risk.
For carmaker Ford Otosan, the bank expects export growth to continue next year. However, it warned that the strong domestic demand for passenger vehicles seen this year may cool in 2026, limiting the company's ability to expand profit margins.
