Gold Smuggling in Turkey Hits Historic Peak

A startling “explosion” in the illicit trade in precious metals has redefined Turkey’s economic landscape. According to the latest analysis by Prof. Dr. Ali Hakan Kara, a former Chief Economist of the Central Bank (TCMB), gold smuggling reached an unprecedented zenith in 2025. Seized amounts surpassed $700 million, a figure that dwarfs the total combined captures of the previous decade.

Visualizing the Smuggling “Explosion”

For years, the value of seized precious metals remained relatively stable, hovering around the $100 million mark as recently as 2024. However, the 2025 data show a near-vertical trajectory. This surge provides a “smoking gun” for economists who have struggled to explain massive discrepancies in Turkey’s balance of payments.

The Quota Catalyst: Why Smuggling Skyrocketed

Experts point to the 2022 gold import quotas as the primary driver of this black-market boom. While the government implemented these limits to narrow the current account deficit, the resulting supply-demand gap created a lucrative incentive for illicit entry. With legal imports restricted, the market turned to unofficial channels to meet Turkey’s domestic hunger for gold, effectively shifting the trade from the books to the borders.

Solving the “Net Error and Omissions” Mystery

One of the most debated topics in Turkish macroeconomics has been the “Net Error and Omissions” (net hata noksan) account—a ledger used for currency inflows and outflows of unknown origin. Prof. Dr. Kara argues that the $700 million in seizures constitute concrete evidence that a significant portion of these mysterious funds is directly tied to the clandestine gold trade.

“I have been pointing out for a while that the increase in Net Error and Omissions might stem from gold smuggling, but I couldn’t provide concrete proof,” Kara stated. “Ministry of Trade statistics now support this view. Gold smuggling exploded in 2025.“

Economic Implications for 2026

The scale of the smuggling highlights a dual challenge for policymakers:

• The Policy Gap: The 2022 quota system may be backfiring by fostering a massive informal economy.

• Fiscal Pressure: Large-scale unregistered gold movements complicate the Central Bank’s ability to track actual foreign exchange flows and maintain monetary stability.

As the government evaluates trade policies for the remainder of 2026, the pressure to reform import restrictions to curb illicit trade is mounting.