Turkey

What does the map enable, and what does it threaten?

Turkey's map is a great asset. It spans Europe and Asia, holds the straits between the Black Sea and the Mediterranean, and is large and mountainous enough to be hard to threaten by land. It sits on the trade routes between Europe, Russia and the Middle East, and its biggest suppliers reflect that: China, Russia and Germany led its imports in 2025⁹. The same position puts it next to every crisis in the region, from Syria to Iran, and it has little oil or gas of its own, so high energy prices feed straight into inflation; its central bank warned in October that geopolitical tensions were keeping energy prices high¹³. A commanding position in a rough neighbourhood.

Is the population growing, skilled and staying?

Turkey has a large, still fairly young population: about 88 million people with a median age near 34^1,2. But the base is shrinking. The fertility rate fell to 1.42 children per woman in 2025, below replacement for the ninth year running, with 895,374 live births¹⁰. Schools are middling. In PISA 2022 Turkey ranked 39th of 81 countries in mathematics, up from 42nd of 79 in 2018¹⁴, but its students scored below the OECD average in all three subjects¹⁵. Unemployment was 7.8% in August 2026, and 13.0% among the young⁵. A big workforce whose quality and size have both peaked unless policy changes.

What habits does the society reward?

The habits behind clean, predictable government are weak. Turkey scored 31 on Transparency International's 2025 index, three points lower than the year before, and ranked 124th of 182 countries⁶. The September 2026 collapse of a fund bubble, which led regulators to order the liquidation of 131 investment funds after some warned they could not meet redemptions¹⁶, points to loose market discipline. Against that, Turkey has a strong entrepreneurial and manufacturing tradition, visible in a defence industry that crossed US$10 billion in exports in 2025¹². Comparable data on trust and work norms is thin, hence low confidence. This score is about institutions and social habits, not about any group.

Who rules, how are they chosen, and are they competent?

Erdoğan's recent deeds are better than his reputation for economics. After years of unorthodox policy, tight money has brought annual inflation down to 29.73% in September 2026³, and the central bank felt able to cut its rate to 36% in October¹³. Parliament passed a law to disband the PKK with 468 of 600 votes, including the pro-Kurdish DEM Party¹⁷, the most concrete step yet in ending a conflict that has killed tens of thousands. The defence industry he backed exported over US$10 billion in 2025¹². Against this, his main rival, Istanbul's ousted mayor, is on trial on corruption charges that he denies¹¹, and the fund crisis exposed weak oversight¹⁶. Effective, but at the cost of institutions.

Is there rule of law, low corruption and predictability?

Turkey keeps public order, but the rule of law is weak and weakening. It scored 31 on Transparency International's 2025 index, down three points, ranking 124th of 182 countries⁶. The judiciary is at the centre of a political fight. Ekrem İmamoğlu, the opposition's main presidential hopeful, is on trial accused of leading a criminal organisation; he and his party deny the charges, while the government denies exerting influence over the judiciary, which it says is independent¹¹. Regulators failed to stop a fund bubble until 131 funds had to be liquidated¹⁶. Whichever side is right, courts whose neutrality is so openly disputed are a cost to order.

Where are the fault lines, and how stable are they?

Turkey is divided along two lines, and they are moving in opposite directions. The oldest, between the state and the Kurdish insurgency, is narrowing: parliament passed a law in August 2026 to disband the PKK, backed by the ruling party, its nationalist allies and the pro-Kurdish DEM Party¹⁷. The newer line, between government and opposition, is widening. The main opposition party denies the corruption charges against its leading candidate, while the government says the courts are independent¹¹. A society settling one old conflict while a new political one sharpens.

Why does the world need this country?

Turkey matters to every power around it. The IMF puts its 2026 GDP at about US$1.8 trillion⁴. Russia was its second-largest supplier in 2025, at US$42.4 billion, while Germany was its top export market⁹. It is a NATO member, controls the straits, and has become a security partner in the Middle East: in August it joined Saudi Arabia and Pakistan in a pact treating an attack on one as an attack on all¹⁸. Its arms industry exported over US$10 billion in 2025¹². What holds the score down is a fragile economy that still needs foreign money.

What does it need, want and fear?

Need: affordable energy, since high prices threaten its progress against inflation¹³; continued foreign investment and financial stability after the fund crisis¹⁶; and a secure southern border with Syria and Iraq. Want: an end to the PKK insurgency on its own terms¹⁷; a unified Syria with one army, under a government it backs¹⁹; a larger role as a regional security power through the Mecca pact¹⁸; and growing defence exports¹². Fear: a widening Iran war on its border; a renewed Kurdish conflict; another currency and inflation crisis; and domestic unrest around the opposition trials¹¹.

Who are its patrons, rivals and hedges?

Turkey is a skilled balancer. It is a NATO member, yet Russia was its second-largest source of imports in 2025, at US$42.4 billion, after China at US$49.6 billion, while Germany was its top export market⁹. It is an ally of Syria's new government and welcomed the deal to fold the Kurdish-led SDF into the Syrian army, insisting on one state and one army¹⁹. In August it signed a mutual defence pact with Saudi Arabia and Pakistan, and in October agreed to the rapid deployment of forces in Saudi Arabia^18,20. Each relationship gives it leverage over the others. The risk is that a wider regional war forces it to choose.

Can it deter, or does it depend on others?

Turkey is one of the region's strongest military powers, and it increasingly arms itself. SIPRI puts military spending at 1.91% of GDP in 2025, up from 1.62% in 2022⁷. Its defence and aerospace exports crossed US$10 billion for the first time in 2025¹², a sign of an industry that now sells abroad at scale. It is now committing forces abroad: under the Mecca pact it agreed to the rapid deployment of forces in Saudi Arabia²⁰. It has no nuclear weapons of its own. Readiness data is limited, hence medium confidence.

Rising, stagnant or declining, and how fast?

Judged by results, Turkey is growing steadily but not fast, and fragility remains. The IMF records growth of 3.5% in 2024 and 3.7% in 2025, and forecasts 2.7% for 2026, with inflation falling from 58.5% in 2024 to a forecast 31.2% this year⁴. Annual inflation was 29.73% in September³, and the central bank cut its rate to 36% in October, while warning that energy prices remain a risk¹³. Against this, the fund collapse in September left 131 funds in liquidation¹⁶, and the fertility rate keeps falling¹⁰. Stable, with disinflation the main gain still to be locked in.