Turkish economy expanded 2.5% on a yearly basis in the first quarter, official data showed on Monday, with growth slowing for a third consecutive quarter but staying positive despite tighter monetary conditions and the recent Iran war.
The slowdown in growth in the January-March period partially coincided with the start of the U.S.-Israel-Iran war, which sent energy prices soaring and revived inflationary pressures.
The strongest branch of economic activity during the first quarter was information and technology, which grew 9.5%, while agriculture, forestry and fishing grew 4.6%, Turkish Statistical Institute (TurkStat) data showed. Industry shrank 0.8%.
The lira was little changed at 45.9160 against the dollar after the data.
TurkStat said first-quarter gross domestic product (GDP) grew 0.1% from the previous quarter on a seasonally and calendar-adjusted basis,
In a Reuters poll, economic growth was estimated to have slowed to 2.7% in the first quarter, while in 2026 as a whole the economy is expected to expand by 3.15%.
There was no revision to the 2025 growth rate of 3.6%, the data showed. After growing 4.7% in the second quarter last year, growth slowed to 3.8% and then 3.4% in the following two quarters.
Economists are closely monitoring the central bank's response to the inflation, which surged to 4.18% month-over-month in April for an annual rate of 32.87%. In its second inflation report of the year, the central bank raised its year-end inflation interim target from 16% to 24%, while signalling that all options remain on the table for its next interest rate decision.
