Turkey: Growth resilience and inflation risks – ING

FXStreet Insights Team FXStreet

ING’s Muhammet Mercan projects Turkey’s 4Q25 GDP growth at 3.9%, implying 3.8% for 2025, underpinned by domestic demand but with some quarterly loss of momentum. He expects February inflation to remain high at 2.9% month-on-month and 31.4% year-on-year, warning that a more negative surprise could prompt the central bank to pause tightening at the March MPC meeting.

Domestic demand strength versus sticky prices

"We expect growth at 3.9%, translating into 3.8% growth for the entire 2025."

"This implies continuing resilience in GDP amid domestic demand–driven growth, though some loss of momentum is likely on a quarterly basis."

"Inflation, on the other hand, should remain high in February, as warned by the central bank, with upward pressure from food prices ahead of Ramadan."

"We see the monthly figure at 2.9%, with annual inflation inching up to 31.4% from 30.7% a month ago."

"A more negative surprise would lead the Bank to be more cautious and hence possibly pause at the March MPC meeting, in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD gains traction near 0.7100 as the post-Fed USD rally pauses

AUD/USD finds fresh buyers and retakes 0.7100 in the Asian session on Thursday as the US Dollar pauses its hawkish Fed-inspired rally to its highest level since late July. However, RBA rate-hike bets and hopes for US-Iran diplomatic efforts lift risk sentiment and support the risk-sensitive Australian Dollar and the major.

USD/JPY reverses a dip below 156.00 as focus shifts to BoJ

USD/JPY is reversing a brief dip below 156.00 in the Asian session on Thursday, looking to snap a three-day winning streak to a nearly two-week top set the previous day. The US Dollar pauses following the post-Fed rally to seven-week highs, while a more hawkish repricing of the BoJ's policy normalization path supports the Japanese Yen. This keeps the pair's upside limited, with the focus now shifting to the BoJ policy decision due on Friday.

Gold bounces but not out of the woods yet

Gold is facing fresh sellers above $4,300 early Thursday, stalling its recovery from six-week lows of $4,235 reached soon after hawkish US Federal Reserve monetary policy announcements.

XRP and XLM rebound amid mixed signals

Ripple (XRP) and Stellar (XLM) extend their recovery at the time of writing on Thursday after finding support at key technical levels. However, mixed derivatives and on-chain data for both altcoins suggest that traders remain cautious and have yet to show strong conviction in a sustained rebound. Derivatives data shows a mixed and cautious outlook among traders.

The Fed rate hike: What happens now?

The dust has settled on tonight’s Fed meeting and the market reaction is clear: the Fed’s signal that there could be a series of rate hikes has spooked financial markets. Bonds sold off at the short end of the Treasury curve and US stocks also fell, led by the Dow Jones Industrial Average, which slipped more than 1% on Wednesday night.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.