Turkey’s economy grew by 3.6% in 2025, supported by domestic demand and a strong performance in the construction sector, according to official data released from the Turkish Statistical Institute (TurkStat). On a quarter-on-quarter basis, the economy grew 0.4% in the final quarter of 2025 on a seasonally and calendar-adjusted basis.
Construction and Services Drive Expansion
Sector data revealed that construction was the leading contributor to growth in 2025, with value-added increasing 10.8%. Information and communication activities followed, expanding by 8%. Industrial value-added rose 2.9%, marking the strongest increase in four years, while agriculture, forestry and fishing contracted by 8.8%, reflecting adverse weather conditions.
Treasury and Finance Minister Mehmet Şimşek said production increased across most sectors despite challenges in agriculture. He said: "While the effects of frost and drought in agriculture continued in the final quarter of the year, production increases were sustained in other sectors."
The data shows that construction growth was partly driven by accelerated housing deliveries and project completions in earthquake-affected regions, providing new housing stock for investors and families.
Domestic Demand Remains Key Growth Driver
Private consumption rose 5.2% year-on-year, contributing 3.7 percentage points to overall growth. Investment increased 5.4%, adding 1.4 percentage points, supported primarily by construction investment, which grew 8.7%, while machinery and equipment investment rose 2.8%.
Şimşek noted that current account deficit remained at 1.6% of gross domestic product, which he described as sustainable. He said: "To make our gains permanent, we will support our policies with structural and supply-side steps. We will continue to implement our program with determination to ensure price stability, which will provide sustainable high growth and a fairer income distribution."
Outlook for 2026 Remains Positive
Economic officials expect growth to strengthen in 2026, supported by improving financial conditions and demand from trading partners, assuming geopolitical risks ease. In its medium-term programme, the government projects growth of 3.8% this year.
Leading indicators point towards a gradual acceleration in activity. Analysts also note that policy rate cuts in the second half of 2025 and expectations of further easing could provide additional support to domestic demand.
Cameron Deggin 
Founder & CEO, Property Turkey
Cameron Deggin is Founder and CEO of Property Turkey. A former finance professional and FCCA-qualified accountant, he founded the company in 2001 after recognising Turkey’s investment potential. With more than two decades analysing Turkish real estate, Cameron regularly advises international investors and is quoted by media including the Financial Times and BBC.
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