Turkey's export demand falls as central bank sees no rate‑cut room

Turkey’s Export Demand Index remained below its long‑term average in May 2026, signalling weak global demand. Export values dropped 9.5 % year‑on‑year to $22.46 billion, while imports fell 10.8 % to $28.07 billion, narrowing the trade gap but leaving overall trade volume down 13.9 % to $41.53 billion. Excluding energy and non‑monetary gold, exports to the top five markets – Germany, the United States, the United Kingdom, Italy and Spain – accounted for 29.7 % of total shipments. The export‑to‑import coverage ratio edged up to 80.0 % in May, yet the labor market shows persistent real unemployment despite a flat official jobless rate.

Commerzbank economists warned that, despite a modest slowdown in core inflation, Turkey’s underlying price pressures remain high and the central bank has no room to lower policy rates. They noted a headline‑inflation growth rate of about 24 % annualised and affirmed that the 5 % target remains far off. Energy‑price relief is insufficient to generate a durable drop in overall inflation, leaving rate‑cut signals unsupported.