Economic Red Alert: 23,000 Businesses Close in Turkey

Turkey is on economic red alert: The latest SGK data reveals a devastating blow to the Turkish economy: 23,000 businesses shuttered their doors in a single month, leaving 324,000 people unemployed between December 2025 and January 2026. While Finance Minister Mehmet Şimşek’s orthodox program had previously shown promise, the combination of high inflation, suppressed exchange rates, and the escalating war in the Middle East has pushed the real sector to the breaking point. Economists now warn that the most difficult days—defined by rising poverty and a potential stagflation trap—are yet to come.

The Textile Collapse: 388,000 Jobs Lost in Three Years

The labor-intensive textile and ready-to-wear sectors have become the epicenter of this industrial retreat. Since late 2022, the total number of employees in these sectors has plummeted from 1.22 million to roughly 833,000, marking a loss of over 388,000 jobs. In the same period, nearly 11,000 workplaces have vanished.

Toygar Narbay, President of the Turkish Clothing Manufacturers Association (TGSD), warned that without immediate intervention, another 100,000 jobs are at risk this year. He emphasized that industrialists cannot solve a macro-crisis alone, calling for:

• Currency Correction: Allowing the exchange rate to reflect true costs to regain global competitiveness.

• Direct Support: A 10% foreign exchange conversion support for net exporters and labor subsidies of up to 6,000 TL per employee through 2028.

• Urgent Action: Warning that “once a factory closes, it does not reopen,” Narbay noted that the current “wait and see” approach is costing Turkey its manufacturing DNA.

Economic Red Alert: Gold Purchases Double

As the real economy struggles, Turkish citizens are increasingly turning to plastic to bridge the gap. BKM (Interbank Card Center) data show that credit card spending at jewelry stores—often used as a hedge through gold investments—doubled in the first two months of 2026, reaching 122.8 billion TL.

With the total number of cards in Turkey hitting 469.6 million, the average citizen now carries roughly 6.5 cards. This surge in credit dependency highlights a shift in consumer behavior: cards are no longer just for convenience but are essential for basic needs, with 929.7 billion TL spent at markets and AVMs in the first two months of the year alone.

The Looming Stagflation Trap

Economist Prof. Dr. Sinan Alçın points out that the Manufacturing PMI has remained below the critical threshold for 28 consecutive months. He warns that the economy is heading toward stagflation—a toxic mix of stagnant growth and high inflation.

As costs rise and the currency remains suppressed, labor-intensive industries are increasingly shifting production abroad, resulting in a permanent loss of domestic employment and a “deepening cycle of poverty” for the working class.

Source: Nefes