If you’re visiting Türkiye in 2026, you’ll still find the same energy, humor, and generosity that make this city unforgettable. But you’ll also be stepping into a place where money has become a daily conversation, and where people have had to become amateur economists just to stay afloat. Understanding that reality doesn’t ruin the magic of travel — it deepens it.
Table of Contents
Introduction to the Recent Trends
The Other Tour was established in 2011 and has been offering unique city tours in Istanbul for many years. The cost of participation in our tours has remained constant at 200€ for many these years, which was equivalent to 600 Turkish Lira. However, due to the significant depreciation of the Turkish currency over the last few years, the value of 1 Euro has increased from 3 Turkish Lira to almost 35 Turkish Lira, which is a staggering 12 times higher!
The significant depreciation of the Turkish currency is just one of the many challenges that the country is currently facing, and it is likely to continue to have a significant impact on the daily lives of Turkish citizens.
Turkish Economy 101
Turkey is a middle-income country with a mixed economy that has been growing rapidly in recent decades. The country has a diverse set of industries, including agriculture, manufacturing, and services, and has a population of approximately 84 million people.
In terms of its economic history, Turkey underwent a period of rapid industrialization and modernization in the mid-20th century, which was accompanied by a shift away from agriculture and towards manufacturing. In the 1980s, the government implemented a series of economic reforms aimed at liberalizing the economy and encouraging private investment, which helped to spur further growth.
Strength and Advantages
Today, the Turkish economy is characterized by a number of strengths and challenges. Some of the key strengths include:
- Strategic location: Turkey is strategically located at the crossroads of Europe and Asia, which makes it an important hub for trade and commerce.
- Diversified economy: Turkey has a diverse set of industries, which helps to reduce its reliance on any one sector.
- Large and growing consumer market: Turkey has a large and growing middle class, which presents opportunities for companies looking to sell consumer goods and services.
- Skilled workforce: Turkey has a relatively well-educated and skilled workforce, which makes it an attractive location for businesses looking to set up operations.
Biggest Industries of Turkish Economy
Turkey is a net importer of goods and services, meaning that it imports more than it exports. According to the Trading Economics, in 2023 the country’s total exports were approximately $19.3 billion in April, while its total imports were approximately $28.2 billion in the same month. In the January-April period of 2023, the trade deficit increased to USD 43.5 billion.
Here are some of the key industries that contribute to Turkey’s exports:
- Textiles: Turkey is one of the world’s largest producers and exporters of textiles and apparel. The country has a well-developed textile industry, which produces a wide range of products including cotton, wool, silk, and synthetic fabrics.
- Automotive: Turkey has a growing automotive industry, which produces a range of vehicles including cars, buses, and trucks. The country is home to several major automakers, including Ford, Fiat, and Toyota.
- Electronics: Turkey has a rapidly growing electronics industry, which produces a range of products including televisions, computers, and mobile phones. The country has been investing heavily in this industry in recent years, and it has become an increasingly important source of exports.
- Tourism: Turkey has a rich cultural heritage and a stunning natural landscape, which makes it an attractive destination for tourists. The country’s tourism industry is a significant source of income, with approximately 45 million visitors in 2022.
In addition to these industries, Turkey also has a significant agricultural sector. The country produces a range of crops, including hazelnuts, olives, and citrus fruits, which are major exports. Other important agricultural products include tea, tobacco, and cotton.
Overall, Türkiye has a diverse set of industries that contribute to its economy, with exports playing an important role. However, the country’s economy is also subject to risks such as inflation, political instability, and global economic conditions, which can have an impact on its growth prospects.
Challenges Facing Türkiye
Türkiye has officially been called “Türkiye” on the world stage only since 2022 — a symbolic shift that happened just as the country stepped into a strikingly different economic reality. In the four years since, property values in lira terms have exploded nearly tenfold, while in dollar terms, the average home has roughly doubled in value – that means a staggering %100 increase in property value in USD terms within a few years!
Beneath those numbers lies the real story: the poor are poorer, the middle class feels squeezed into survival mode, and the rich — especially those holding hard assets — are doing just fine.
Some of the key challenges facing the Turkish economy include:
- High inflation: Turkey has struggled with high inflation for several years, which has eroded the purchasing power of consumers and made it difficult for businesses to plan for the future.
- Large current account deficit: Turkey has a large current account deficit, which means that it is importing more than it is exporting. This has contributed to the depreciation of the lira and made it more difficult for the country to service its foreign debt.
- Political instability: Turkey has been experiencing political instability in recent years, which has created uncertainty and made it difficult for businesses to plan for the future.
- Geopolitical tensions: Turkey is located in a volatile region, which has created security concerns and made it difficult for businesses to operate.
- Debt levels: Turkey has a relatively high level of public and private debt, which has made it difficult for the government and businesses to invest in new projects and growth.
- Currency depreciation: The Turkish lira has lost value against major currencies such as the US dollar and the euro, which has made it more expensive for businesses to import goods and raw materials.
These factors, along with others, have contributed to the challenges facing the Turkish economy in recent years. However, it is important to note that the situation is complex and there is ongoing debate among economists and policymakers about the best way to address these challenges.
Currency Depreciation
Currency depreciation refers to the decrease in the value of a country’s currency relative to other currencies in the foreign exchange market. A country’s currency may depreciate due to various factors, including inflation, rising debt levels, political instability, or changes in economic policy.
In recent years, Turkey has experienced significant currency depreciation. In August 2018, the Turkish lira lost almost 40% of its value against the US dollar in just a few months. Since then, the Turkish economy has been in a downward spiral that has left many citizens feeling as though they are experiencing hyperinflation.
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The currency depreciation had a significant impact on Turkey‘s economy, causing inflation to soar and leading to a recession. The cost of imported goods increased, and businesses that had borrowed in foreign currencies found it increasingly difficult to service their debts. The crisis also triggered a sell-off in Turkish stocks and bonds, leading to a decline in investor confidence.
To stabilize the currency, the Turkish government implemented a series of measures, including raising interest rates and tightening monetary policy. The measures helped to stabilize the lira, but the currency remains vulnerable to external shocks and is still significantly weaker than it was before the crisis.
Overall, the currency depreciation in Turkey has been a significant challenge for the country’s economy, and it will take time for the country to fully recover from the crisis.
There have been comparisons made between Turkey’s economic policies and those of China, as both countries have pursued export-oriented growth strategies. However, it’s important to note that there are significant differences in the economic models of the two countries, and the causes of currency depreciation in Turkey are complex and multifaceted.
Was it deliberate?
Currency depreciation is not usually a conscious choice by governments as it can have negative impacts on the economy, such as inflation and reduced purchasing power. However, in the case of Türkiye, the government has been accused of indirectly supporting a depreciation of the Turkish lira.
It’s possible that the Turkish government may have hoped that a weaker lira would make Türkiye a more affordable destination for foreign tourists, which could in turn boost the country’s tourism industry. However, it’s important to note that currency depreciation alone is not enough to drive tourism growth, as other factors such as safety and security, infrastructure, and marketing also play important roles in attracting tourists. Luckily, Türkiye is still doing great in the tourism department. Although, Istanbul fell from the position being the second most visited city in the world in 2024, to the 5th position in 2025. And 2026 might see more dropping!
Moreover, the depreciation of the lira has made imports more expensive, which has contributed to inflation and made it more difficult for businesses to import raw materials and machinery. It has also made it more expensive for Turkish companies to pay back their foreign currency debt, which has contributed to financial strains in some sectors.
Interest Rate Interference
President Erdoğan has been a vocal critic of high interest rates for a long time. He believes that high interest rates are a tool used by international financial institutions to undermine Turkey’s economy and that they harm the average Turkish citizen by making borrowing more expensive.
Erdoğan’s economic philosophy is heavily influenced by Islamic principles, which place emphasis on the importance of low interest rates as a means of ensuring economic stability and reducing income inequality. He has argued that interest rates should be kept low to encourage borrowing and stimulate economic growth.
However, many economists and analysts argue that Erdoğan’s stance on interest rates is misguided, and that high interest rates are necessary to combat inflation and stabilize the economy. Inflation has been a persistent problem in Turkey, and many believe that Erdoğan’s opposition to high interest rates has greatly contributed to the country’s economic troubles in recent years.
A SHIFT IN COURSE: Turkey's Interest Rate Hikes
In a remarkable turn of events, 2023 saw a series of significant rate hikes by the Central Bank of Turkey. On August 24, the bank raised the interest rate to 25%, followed by another substantial increase to 30% on September 21, and is anticipated to further hike the rate to 35% soon.
These decisions marked a noticeable shift in the monetary stance under President Erdoğan‘s leadership, who, despite his historical opposition to high interest rates, endorsed the tightening monetary policy to battle the soaring inflation rates.
The aggressive rate hikes, which came as a response to the spiraling inflation and were aimed at stabilizing the Turkish Lira, reflected a change in the economic approach to mitigate the country’s financial woes. This new chapter of economic adjustments underlines a crucial attempt to align the monetary policy with the prevailing economic exigencies, seeking to strike a balance between curbing inflation and fostering financial stability.
What to Expect in the Near Future
The economic outlook for Turkey in the near future is subject to several factors, both domestic and global. Here are a few key points to consider:
- Inflation: One of the biggest challenges facing the Turkish economy is high inflation, which has been running above 60% for much of the past months. The Turkish government has been implementing policies aimed at curbing inflation, such as raising interest rates, but it remains to be seen how effective these measures will be.
- Political stability: Turkey has experienced a great deal of political turbulence in recent years, from suicide bombings to coup attempts, which has contributed to uncertainty and made it difficult for businesses to plan for the future. If the political situation stabilizes, it could help to boost confidence and attract more investment. But we all know that this is very unlikely. If anything, things are about to get worse, much worse! Yes it’s a bleak picture and I sure hope I’m wrong.
- Exchange rate stability: The depreciation of the Turkish lira has been a major concern for the country’s policymakers, as it has contributed to inflation and made it more difficult for businesses to operate. The government has been taking steps to stabilize the exchange rate, such as selling foreign currency reserves and tightening monetary policy, but these efforts have had mixed results.
- Global economic conditions: Turkey is a small open economy that is heavily reliant on exports, so global economic conditions play a significant role in its economic outlook. If there is a global slowdown, it could reduce demand for Turkish exports and hurt the country’s growth prospects.
2026 Update: Inflation Down, Reality Still Rough
Türkiye entered 2026 with a strange mix of “better” and “worse” happening at the same time. On paper, inflation has cooled compared to the chaos of the past few years, and the central bank has begun to ease interest rates. But on the street, everyday life still feels unstable. Prices continue to climb, habits keep changing, and the question people quietly ask each other hasn’t changed at all: “How do we make next month work?”
The latest official inflation figure sits around 31% year-on-year, which sounds like a victory only because it used to be far higher. In real terms, that still means the price of normal things—food, transport, rent, school expenses—keeps shifting, and it’s impossible for most people to plan ahead with confidence. When inflation stays this high for this long, it doesn’t just raise prices; it rewires behavior. People buy earlier because tomorrow will cost more. They postpone repairs. They downgrade brands. They take on extra work. They become suspicious of “fixed prices” because nothing feels fixed anymore.
Interest rates remain extremely high. The policy rate is still hovering around the high 30s, which tells you how serious the authorities are about squeezing inflation down. High rates can slow price growth, but they also make borrowing painful and cash flow tight, especially for small businesses.
In a city like Istanbul—where cafés, shops, and family-run places survive on constant turnover—tight money is felt immediately. You see it in smaller portions, shorter menus, constant repricing, and a new kind of fatigue behind the friendly face.
The Reality on the Ground
And then there is the part travelers notice most: Istanbul has become expensive even for Western tourists who come here with the relative strength of Euros and Dollars compared to the Turkish Lira. For years, visitors described Türkiye as “amazing value.” In 2026, that sentence comes with a pause. Yes, the exchange rate can still make some things feel affordable. But tourism districts now price like global-city neighborhoods, and the gap between “local Istanbul” and “tourist Istanbul” has widened. A simple coffee, a snack, a quick taxi ride, a casual meal—these can suddenly feel close to Scandinavian prices (if not more expensive), especially in the most popular areas. The city is not just dealing with inflation; it’s also dealing with a tourism economy that learned it can charge more, because demand keeps coming.
That doesn’t make Istanbul less worth visiting. It makes it more important to visit with awareness. Türkiye is not a “cheap destination.” It’s a country under pressure, full of people doing real arithmetic to survive. If you’re here as a guest, you will still be welcomed. But you’ll understand the city more deeply if you notice the reality behind the beauty: the way locals adapt, the way businesses improvise, the way everyday life keeps moving even when the numbers don’t make sense.
If you travel with your eyes open, Istanbul gives you something rarer than a bargain: it gives you perspective.
Conclusion: Türkiye doesn’t collapse — it absorbs
The Turkish economy isn’t a single crisis with a neat ending. It’s a long, exhausting stretch of adjustment — sometimes two steps forward, sometimes a hard shove back. Charts may show stabilization, tightening, easing, recovery, or “rebalancing.” But on the street, what people feel is simpler: Can I afford my life next month?
Istanbul remains one of the most compelling cities on earth not because it’s “easy,” but because it’s honest. It shows you the beauty and the tension in the same frame. If you want to understand Türkiye right now, don’t just look at numbers. Listen to conversations. Watch routines. Notice the work people do to keep normal life functioning.
And if you join us, we’ll show you the Istanbul that doesn’t fit into headlines — the human Istanbul.
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