Inflation Is Quietly Eating Turkish Companies Alive

Turkish companies are navigating one of the most punishing inflation environments in the country's recent history. Input costs remain elevated, credit is expensive, and consumer demand is softening as households tighten their belts. The squeeze is hitting from both sides — costs up, revenues under pressure — and many businesses are running out of room to maneuver.

The risks go beyond simple price increases. Companies that relied on cheap short-term borrowing to fund working capital are now rolling over debt at rates that are straining cash flows. Supply chain contracts signed in earlier periods are locking in losses, while vendors are demanding faster payment or walking away entirely. For small and mid-sized businesses without access to capital markets, the options are narrowing fast.

Solutions exist but they require discipline and speed. Businesses that are repricing their products regularly, locking in fixed-rate financing where available, and cutting non-essential costs are showing more resilience. Currency hedging, once considered a luxury for large corporates, is now a survival tool for any company with imported inputs. The companies that will still be standing in 2026 are the ones acting today — not waiting for the central bank to rescue them with rate cuts.

Levent KAYIRA Commentary: Ekonomik Gündem Analysis: I spent 15 years inside Turkish banks watching companies make the same mistake in every inflation cycle — they wait. They assume inflation will peak, rates will fall, and everything will normalize. Some survive. Many don't. This cycle is different in scale but not in structure.

Look at the numbers: policy rate at 46%, annual PPI still running hot, and bank lending rates for commercial loans sitting above 55% in many cases. A company borrowing 10 million TL to fund inventory is paying over 450,000 TL per month in interest alone. That is not sustainable for a business operating on 8-10% net margins.

The companies I see managing best right now have done three things: shortened their receivables cycle aggressively, moved to dollar or euro pricing where their customer base allows it, and built at least 3 months of cash reserve. These aren't sophisticated strategies — they're basics that get ignored in good times.

For investors watching Turkish equities, the earnings season ahead will be brutal for working-capital-heavy sectors: retail, manufacturing, construction materials. The companies with strong balance sheets and pricing power will diverge sharply from the rest. That gap is where the opportunity sits.

Kaynak: Google News Ekonomi