AGP Executive Report

EU-Turkey Trade Watch: A new EU sanctions proposal tied to Russia includes entities based in India and also names companies across multiple countries, including Turkey, raising uncertainty for an EU-India trade deal that both sides are trying to ratify. Energy Diplomacy: Bulgaria’s PM Rumen Radev says Türkiye is seeking to renegotiate the BOTAS gas deal to deepen energy cooperation, including gas transmission and electricity transport, amid arrears and potential damages if the take-or-pay terms change. Aviation & Security: Turkish Airlines is in the spotlight as a Dubai court waived service steps in a case involving a Turkish commodities trader facing a large Russian award claim over alleged forged documents. COP31 Pressure: Nearly 100 groups urge COP31 co-hosts Turkey and Australia to “lead by example” by cutting fossil fuel reliance, warning action must start at home. Defense Industry: Boeing has dropped out of the U.S. Navy’s T-45 replacement competition, leaving other teams as contenders. Regional Tensions: Erdogan and Netanyahu traded harsh accusations again, with Erdogan warning Israel’s actions threaten Turkey.

White Meat Crackdown: Turkey’s justice ministry says court-appointed trustees were assigned to major chicken producers (Şenpiliç, Banvit, Erpiliç, Keskinoğlu, Gedik, Lezita) over allegations of market distortion and unjustified price hikes, while 32 people were detained across eight provinces. Monetary Policy Watch: The Central Bank’s survey shows year-end CPI inflation expectations edging up to 29.14%, with the monthly June rise forecast easing to 1.36%; the bank also held the policy rate at 37% for a third straight meeting as it monitors the inflation impact of the Iran-related energy shock. Inflation Roadmap: Finance Minister Mehmet Şimşek said disinflation will resume after a short delay, while reiterating budget targets despite crude-oil pressure. Regional Diplomacy: Syria reopened its consulate in Gaziantep after 15 years, signaling further normalization with Türkiye. Energy & Trade Routes: With Hormuz risks back in focus, analysis argues Türkiye could position itself as a trade bridge between Asia and Europe—if the land corridor can move from ambition to workable logistics. Aviation Incident: A Turkish Airlines Boeing 777 taxiing at Antalya struck a radar, damaging the wing and injuring one passenger.

Turkey Monetary Policy: Turkey’s central bank kept the policy rate unchanged for a third straight meeting at 37%, citing cooling activity and saying the war’s inflation impact looks temporary. Energy Diplomacy: Foreign Minister Hakan Fidan said Türkiye and Bulgaria reaffirmed plans for a new border crossing near Kapıkule and pushed gas transmission expansion as “strategic” for Eastern Europe’s energy security. US-Iran Shockwave: Trump said he cancelled threatened strikes on Iran after talks reached the “highest level” of Iranian leadership, raising hopes for a deal that could reopen the Strait of Hormuz and lift a US blockade once finalized. Global Markets: The Iran de-escalation sparked a rebound on Wall Street and a sharp drop in oil prices, while investors watched whether the agreement is signed soon. LegalTech Funding: Compuvi raised seed financing at a $40m valuation to expand Confinaid, a preventive legal and compliance risk platform, backed by a Turkish investor and Ozay Law Firm. Regional Watch: Armenia’s election results strengthen PM Pashinyan’s West-facing push but complicate constitutional steps needed to lock in peace with Azerbaijan.

Overseas Contracting Boom: Turkey’s contractors won 40 projects worth $2.3 billion across 15 countries in the first five months, keeping the sector among the world’s top international earners. Monetary Policy Watch: Turkey’s central bank held the key policy rate at 37%, pointing to a slight easing in the inflation trend in May after April’s rise. EV Investment Scrutiny: Turkish lawmakers raised questions over BYD’s $1bn EV factory plan in Manisa; the Industry and Technology minister said the project remains under active supervision under incentive rules. Tech Deal for Istanbul: Scopely agreed to buy a majority stake in Istanbul’s Loom Games in a deal valuing the company at over $1bn, with Loom’s founders staying on. Opposition Party Turmoil: CHP figures linked to ousted leader Özgür Özel resigned from the party assembly, a move that could trigger an extraordinary congress to re-elect a chairman. Telecom Milestone: Türk Telekom’s Netsia BB Suite passed 1 million homes passed, expanding open-source fiber access across Türkiye. Global Markets: Gold’s sharp pullback may not be over, with traders betting weakness could last through 2028. Regional Diplomacy: Foreign Minister Hakan Fidan met Greece’s counterpart in Sofia, urging cooperation in the Eastern Mediterranean and stressing respect for international law.

EIB Clean Energy Push: The EIB signed a €200m deal with Turk Eximbank and TKYB to finance clean energy, with funds earmarked for Turkish SMEs. Free-Trade Talks Restart: Canada and Türkiye agreed to restart initial free-trade discussions, with both sides also exploring renewable and nuclear energy cooperation. Hejaz Railway & Logistics: Türkiye and Saudi Arabia signed MoUs on logistics services and railway cooperation, with plans tied to modernising and extending the Hejaz Railway as an alternative trade route. AI Competition Watch: OpenAI and Anthropic are stepping up warnings about advanced AI risks as the race for bigger models heats up. Meta Under Scrutiny: Turkey’s competition authority opened an investigation into Meta over AI practices. BYD Hits Pause in Türkiye: BYD has shelved its $1bn Türkiye EV plant plan, prioritising Hungary instead. Regional Diplomacy: Azerbaijan, Georgia and Türkiye held a trilateral foreign ministers’ meeting in Istanbul focused on energy, transport and connectivity. Middle East Tensions: Erdoğan warned Israel’s attacks on Syria and Lebanon now threaten Türkiye, while US-Iran strikes and renewed threats keep the region on edge.

Nuclear Power Push: Türkiye’s Akkuyu plant hit a key milestone by loading 163 simulated fuel assemblies into its first reactor, aiming for first electricity by year-end. Green Finance: Türkiye secured €200m from the EIB for its green transition, split between sustainable industry support and green export financing via Türk Eximbank. COP31 Agenda: COP31 host Türkiye put electrification at the center of climate talks, backing a voluntary goal to reach 35% of global energy demand from electricity by 2035. Rail & Trade Corridors: Türkiye and Saudi Arabia signed railway and transport MoUs to boost connectivity via Syria and Jordan, with an eye on extending the route toward Oman to bypass the Strait of Hormuz. Digital & Competition: Meta plans to use off-platform business data for feed and AI personalization, while Turkey’s competition watchdog is also moving on AI-related probes. Energy Security: Türkiye’s inflation outlook faces pressure from the Iran war, while airlines warn of winter flight disruptions as jet fuel costs stay high. Regulation Crackdown: Turkey launched a crackdown on influencers using banned OnlyFans, with prosecutors seeking up to 10 years in jail for alleged obscene content.

Diplomacy & Reconstruction: Libya’s Deputy Commander Saddam Haftar hosted a Turkish delegation led by Ali Onaner, with Ankara highlighting Turkish urban development support in cities like Benghazi and pledging deeper cooperation. EU Maritime Security: The EU launched a renewed crackdown on “dark fleet” activity under Operation Irini, aiming to board and inspect suspicious vessels tied to fraud, false flags, and safety or labor breaches. Connectivity & Rail: Turkey and Saudi Arabia signed MoUs to boost transport, logistics and railway cooperation, including plans to revive the Hejaz Railway as an alternative Gulf-to-Mediterranean trade corridor. COP31 Energy Push: Turkey’s COP31 team is backing a voluntary global target to raise electricity’s share of energy demand to 35% by 2035, positioning electrification as a way to cut fossil fuel exposure and stabilize costs. Islamic Finance & Banking: Erdoğan announced a merger of state participation banks, while Turkey continues promoting Islamic finance to attract development capital. Tech & Regulation: Meta said it will use off-site business activity to personalize users’ feeds and AI chatbot responses, expanding its data-use controls. Markets: Pakistan’s PSX saw a modest rebound on easing regional tensions, with banks leading gains.

Aviation & Trade: Türkiye and Canada have agreed to launch exploratory talks toward a free trade agreement, after ministers met in line with a Carney–Erdogan call, with both sides also pointing to expanded air links and energy cooperation. Tax & Finance: Turkey’s Finance Ministry is asking banks for information on gold metal loans, as policymakers weigh further measures on the precious metal market. Law Enforcement: Turkish security forces detained 47 suspects in a nationwide crackdown on illegal online gambling, seizing a reported 5 billion Turkish lira in detected financial volume and cash hidden in diapers at an airport. Defense Tech: BlackBelt Technologies made its first public appearance at IDEES Plovdiv, unveiling its Forge-OS autonomy software and starting exploratory technical talks with Turkish UAV maker TEUSAN. Airlines: Turkish Airlines plans to expand its direct long-haul network with ultra-long-range aircraft from late 2027, aiming for non-stop routes up to 17 hours. Health & Markets: GEN Pharmaceuticals dosed the first patient in a Phase II proof-of-concept trial for SUL-238 in early, untreated Parkinson’s disease. Regional Energy: Iraq is pushing to boost oil exports via the Kurdistan–Turkey pipeline network, aiming to raise shipments sharply as Hormuz disruptions hit revenues.

Turkey-Venezuela Trade Push: Acting President Delcy Rodríguez met President Erdoğan in Istanbul to deepen cooperation on trade, energy and mining, with Ankara targeting a jump in bilateral trade from $448m (2025) to $3bn. Regional Diplomacy: Turkey postponed the “Blue Homeland” maritime jurisdiction bill tied to its doctrine, likely until after the summer recess, as NATO summit diplomacy approaches. Canada-Turkiye Free Trade Talks: Canada and Turkiye agreed to start exploratory discussions for a potential FTA, also flagging renewable and nuclear energy cooperation and aerospace/defence links. Turkey-Syria Economic Talks: Syrian and Turkish economy ministers will meet in Gaziantep to map the next phase of trade and investment, under a city economies summit with business participation. Business & Law: Prosecutors opened an investigation into 95-year-old Rahmi Koç after a controversial remark about a Kurdish woman, sparking backlash affecting Koç-linked businesses. Aviation Costs Watch: Airlines say Middle East fuel shocks are hitting hard, but taxes and regulation remain their biggest worry. Maritime & Energy: Iraq plans to raise northern oil exports via lines linked to Turkey and Syria toward 650,000 bpd, aiming to reduce reliance on maritime routes.

Aviation & Trade: Turkish Airlines says it will expand its direct network with ultra-long-range Airbus A350-1000 aircraft from late 2027, enabling non-stop flights of up to 17 hours and new reach to cities like Sydney and Buenos Aires. Export Outlook: The Istanbul Chamber of Industry’s Manufacturing Export Markets Climate Index edged up to 50.3 in May, signaling only marginal improvement, with weakness flagged in key European markets but steadier activity in the US and a recovery in parts of the Middle East. Defense Industry Push: A Reuters review says Turkey’s defense exports have more than tripled since 2021 to nearly $10bn last year, as Ankara seeks deeper industrial cooperation with Western partners amid rising European rearmament. Naval Exports: STM launched RAJA LAUT, the second corvette for Malaysia’s LMS Batch-2 project, with the third ship due in August. Regional Risk for Business: Israel and Iran exchanged strikes again after a fragile April ceasefire, raising concerns for shipping and oil prices as Middle East tensions flare. Armenia Politics With Economic Stakes: Armenia’s ruling Civil Contract won a parliamentary election with 49.8%, strengthening Pashinyan’s Westward pivot and keeping pressure on peace and normalization steps involving Azerbaijan and Turkey. Tourism & Travel Rules: Ryanair warned EU Entry/Exit System (EES) rules may slow passport control for some passengers, including routes involving Turkey.

Defence & NATO: UK, Ukraine, France and Germany urged an “immediate and complete ceasefire” after Russia’s Oreshnik missile strikes, while also pushing for faster production of interceptors and deep-strike capabilities ahead of the NATO summit in Ankara. Middle East Energy & Trade: The US Treasury expanded sanctions on Iran-linked LPG shipping, blacklisting six more carriers and adding Turkish-linked individuals tied to UAE-based “shadow fleet” trade. Regional Security: Iran launched missiles at Israel for the first time since an early-April ceasefire, with Israel saying it intercepted the barrage but warning its defences aren’t “hermetic,” as Beirut was hit despite ceasefire hopes. Turkey’s Business Angle: Iraq says it will boost oil exports via alternative routes through Syria and Turkey to 650,000 barrels per day, including higher Kirkuk flows through Ceyhan. Sports & Economy: Galatasaray reportedly targets Jhon Duran and Randal Kolo Muani to deepen its attack alongside Victor Osimhen, signaling another busy transfer push. Elections & Geopolitics: Armenia’s ruling Civil Contract led early parliamentary results with 54% as the vote tests Pashinyan’s Westward pivot.

Turkish Banking Watch: Türkiye’s lenders posted net profit of TRY 363.6bn in Jan–Apr 2026, up from TRY 264.2bn a year earlier, as assets rose to TRY 50.4tn and the NPL ratio edged to 2.65%. Monetary Policy: The Central Bank’s Monetary Policy Committee is set to meet June 11, with most analysts expecting the policy rate to stay at 37% amid May inflation ticking up to 32.6%. Islamic Finance Push: Vice President Cevdet Yılmaz said ethics-based and Islamic finance can support growth and that Türkiye is working to strengthen Istanbul’s role as a financial hub. Tourism Momentum: KPMG’s report says Türkiye beat European rivals on average stay length, with visitors averaging 10.7 days (vs Spain 5.3), while spending per visitor rose 3.7%. Regional Trade & Routes: Transport minister Abdulkadir Uraloğlu outlined plans to modernize the Hejaz Railway and extend it toward Oman as an alternative to Hormuz, alongside corridor projects. Diplomacy for Business: Fidan will host a trilateral Türkiye-Azerbaijan-Georgia foreign ministers meeting in Istanbul focused on connectivity, energy security and commercial ties. Global Risk From Hormuz: US strikes downed more Iranian drones over Hormuz, keeping shipping and energy uncertainty front and center for the region’s economies.

Turkey-Bangladesh Defence Talks: Turkish FM Hakan Fidan met Bangladesh PM Tarique Rahman in Dhaka, calling it a first step toward upgrading ties to a “strategic” level, with plans for annual foreign-minister consultations and annual 2+2 talks (foreign and defence ministers), plus a joint committee mechanism covering trade, investment, Rohingya, climate and regional issues. Black Sea Shipping Risk: A Turkish-flagged trawler was sunk after an apparent attack near Sevastopol, killing one crew member and injuring four, underscoring rising dangers for civilian shipping amid the Russia-Ukraine conflict. Controversy at Koç Holding: Turkish justice authorities opened an investigation into billionaire Rahmi Koç after a hospital-opening “joke” went viral for remarks targeting a Kurdish woman, with officials saying wealth doesn’t exempt anyone from dignity and equality rules. Airline Expansion Watch: Turkish Airlines says it aims to launch nonstop Istanbul–Sydney in 2027 using Airbus A350-1000ULR aircraft, though the business case faces challenges after Qantas delayed its Sunrise ultra-long-haul rollout. World Cup Visa Processing: The US Embassy in Ankara praised staff for processing visas for Iran’s national football team ahead of the 2026 tournament, as visa delays remain a key concern for Iran.

US-Turkey Visa Processing: US Ambassador Tom Barrack praised the U.S. Embassy in Ankara for processing visas for Iran’s national football team ahead of the World Cup, after reports said entry permits were granted about 10 days before the Los Angeles opener. Iraq Security: Iran-backed Iraqi Shi’ite militias announced steps to disarm and hand weapons to state control, with Western officials welcoming it as a move toward renewed Iraqi sovereignty. Bangladesh-Türkiye Defense & Politics: Ankara and Dhaka agreed to form ministerial-level joint committees to deepen defence and political cooperation, with talks also covering trade, investment, joint production and Rohingya coordination. Ukraine-Russia Spillover: Ukrainian drones again hit St. Petersburg, prompting “stay at home” warnings; Russia said many drones were shot down. Middle East Tensions: Iran launched ballistic missiles toward Bahrain and Kuwait after renewed US strikes, drawing sharp condemnation from Gulf states. Turkey-Linked Business: Türkiye’s Meta probe over AI practices and WhatsApp access is reported alongside broader platform commission rules affecting Russian and foreign sellers.

Bangladesh–Türkiye Strategic Push: Turkish FM Hakan Fidan met Bangladesh counterpart Khalilur Rahman in Dhaka, agreeing to deepen defence cooperation and expand trade and investment, with talks also covering a possible free trade arrangement and preferential trade. Rohingya Diplomacy: Both sides reaffirmed support for a safe, voluntary, dignified return of Rohingyas to Myanmar, with Turkey backing a lasting regional solution. Trade Targets: Bilateral trade was cited at $1.36bn in 2025, with both sides aiming to lift it toward $2bn. World Bank Roads Deal: The World Bank approved a $900m package for Iraq and the Kurdistan Region to upgrade key north–south and east–west road corridors linking Baghdad to the Turkish border and onward to Syria and Jordan. Turkey in Global Finance/Policy: Turkey is also in the spotlight as participation finance is framed as a “fairer” model, while Meta faces a Turkish antitrust probe over AI practices. Aviation/Industry Signals: Rolls-Royce reported improved fuel-burn performance from its Trent XWB-84 EP engine, with Turkish Airlines among the operators.

Inflation Watch: Türkiye’s annual inflation edged up to 32.61% in May (from 32.37% in April) as prices rose 1.71% month-on-month, with housing, utilities and energy still driving costs. Diplomacy & Energy Security: Foreign Minister Hakan Fidan backed progress in US-Iran peace talks and stressed the need for safe passage through the Strait of Hormuz for global trade and energy stability. Trade & Investment Links: In Dhaka, Fidan and Bangladesh FM Khalilur Rahman discussed the Rohingya crisis, and possible free/preferential trade arrangements, signing an MoU on cultural heritage protection while inviting Turkish business into textiles, shipbuilding and defense. Defense Exports: Türkiye’s defense and aerospace exports hit $992m in May, up 33.9% year-on-year, with the sector’s export share rising to 5.1%. Aviation Deal: Turkish Airlines cleared a major step toward buying a minority stake in Air Europa after Spain granted FDI approval; the €300m investment is expected to close in 2026. Crypto Payments: Ripple’s RLUSD stablecoin expanded to 40+ blockchain ecosystems via Wormhole, with Turkish exchange partners cited for local access.